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Gov. Rick Perry  (Source: Bloomberg)
He said the pros of allowing this would outweigh the cons

Not long ago, Texas told Tesla Motors to take a hike when the automaker wanted to sell its electric vehicles (EV) directly to customers without the use of auto dealers. But it seems that the Lone Star state is changing its tune now that Tesla's giant Gigafactory is on the line. 
 
According to Dallas News, Gov. Rick Perry (R-TX) indicated that Texas needs to take a second look at its state rules -- which he referred to as "antiquated" -- that prevent Tesla from selling its EVs directly to customers. 
 
"Tesla’s a big project,” said Perry. “The cachet of being able to say we put that manufacturing facility in your state is hard to pass up.
 
“I think it’s time for Texans to have an open conversation about this, the pros and the cons. I’m gonna think the pros of allowing this to happen outweigh the cons.”
 
Perry wants Tesla's Gigafactory, which the automaker plans to build in a Southwest state in the U.S. The factory aims to supply batteries for up to 500,000 EVs by the year 2020. The gigafactory would cost $5 billion USD, span as much as 1,000 acres, and employ about 6,500 people. It would also largely be powered by renewable energy. 
 
Four states -- Texas, Arizona, New Mexico and Nevada -- are pushing to become the site for the Gigafactory. Whichever state Tesla chooses will see great economic benefits from the large-scale plant; hence Texas' new view on direct sales.
 
The state realizes that Tesla likely won't choose it if Texas doesn’t allow the automaker to sell its vehicles without the help of auto dealers. 
 
It's possible that Tesla CEO Elon Musk is using the Gigafactory as leverage to get the direct sales laws changed in certain U.S. states, and it looks to be working as Arizona recently passed a bill to allow Tesla to do just that.
 
 
Texas Rep. Jason Villalba (R, Dallas) recently wrote Musk a letter in an attempt to patch things up with the automaker. He said he's a proponent of the Tesla-backed House Bill 3351, and that Texas is the perfect state for the Gigafactory due to its warm climate (for the solar-ran factory) and large labor pool to fill factory positions.  
 
Earlier this month, New Jersey Gov. Chris Christie’s administration proposed a new rule that requires a person to have a franchise agreement with an auto manufacturer in order to be granted a license to sell. Tesla already had two stores in the state at the time. 
 
Shortly after, the New Jersey Motor Vehicle Commission voted in favor of the ban of direct auto sales. This means that the two stores must be turned into showrooms and nothing more after April 1, 2014. 
 
New Jersey is now the third state to ban Tesla's direct sales model. 

Source: Dallas News





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I find it hypocritical
By FITCamaro on 3/25/2014 8:57:08 AM , Rating: 0
That this California based company isn't even considering it's home state for where to put this factory. I mean to anyone with common sense, it's blatantly obvious why. Because Commifornia is the most anti-business state out there.




RE: I find it hypocritical
By maugrimtr on 3/25/2014 9:39:57 AM , Rating: 2
quote:
That this California based company isn't even considering it's home state for where to put this factory. I mean to anyone with common sense, it's blatantly obvious why. Because Commifornia is the most anti-business state out there.


Telsa already have a factory in Fremont, California. Apparently, it's not as commie as you thought.


RE: I find it hypocritical
By retrospooty on 3/25/2014 10:43:38 AM , Rating: 2
California is never as commie as he thinks. I am positive he has Haight Ashbury in the late 60's early 70's as his permanent impression of the state. Forget the millions and millions of republicans, and the tech capital of the world (Silicon valley), its just a bunch of commies and fags right?


RE: I find it hypocritical
By Jeffk464 on 3/25/2014 5:46:56 PM , Rating: 2
California is huge and has very different politics based on the area you are talking about. Why do you think proposals to split up the state keep coming around?


RE: I find it hypocritical
By Reclaimer77 on 3/25/14, Rating: 0
RE: I find it hypocritical
By Dr. Kenneth Noisewater on 3/25/2014 10:44:32 AM , Rating: 2
They got a sweet deal for that plant, and sweet deals and free tax gimmes are the only way California can actually get businesses these days.

That said, Texas won't happen without highly extraordinary effort from Perry, such as calling a special legislative session for the express purpose of passing laws that allow for Tesla sales.

That's not happening, so IMO the plant will end up in Nevada.


RE: I find it hypocritical
By lithium451 on 3/25/2014 9:24:03 PM , Rating: 2
Pay attention doc - that's the only way most states attract new business these days, especially all those "right-to-work" southern states.

It a great way to continue the massive wealth transfer to the 1% of the 1%.


RE: I find it hypocritical
By retrospooty on 3/25/2014 10:18:55 AM , Rating: 2
California has an extremely high wage level, so building something like a factory to make batteries with mostly low end manufacturing jobs isn't cost effective.


RE: I find it hypocritical
By Jeffk464 on 3/25/2014 5:49:58 PM , Rating: 2
Not really, CA has a very high cost of living and public unions have gotten themselves insanely good pay packages, but low end jobs don't pay any better than anywhere else. Basically if you don't have a high power job its time to move out of the state.


RE: I find it hypocritical
By retrospooty on 3/26/2014 8:03:05 AM , Rating: 2
" CA has a very high cost of living "

That is what I am saying. high cost of living, high rent/property value + high wages balances out somewhat for people that live there, but for a business it doesn't.


RE: I find it hypocritical
By Mint on 3/26/2014 1:49:25 PM , Rating: 2
This is going to be a very modern factory. Direct wages for production workers aren't going to be a significant factor, because it'll be heavily automated. 6500 jobs is not a lot for a $5B factory. Even if locating in the boonies of CA means a $5/hr premium over Texas (unlikely), that's only $65M/yr, or $1-2 per kWh.

The big economic effects are going to be from building all the equipment that Tesla will buy, and that'll probably come from many places.

The main reason not to locate in CA is probably land cost. It's also a waste of publicity, as Tesla would love Texans to feel local pride for their cars. Tesla sold 1/3rd of their 2013 production in CA, and Texas is the second largest state.


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