By Barbara Kessler
A column in Bloomberg Businessweek rightly takes Texas to task for missing out on the chance to host Tesla’s planned lithium battery plant, which is expected to put 6,500 people to work.
Writer Kyle Stock tells the richly ironic story of how Gov. Rick Perry traveled to California to make the case for placing the Tesla plant in Texas, while meanwhile, back home, Texas had locked Tesla out of its fertile auto market.
Texas has not allowed Tesla to sell directly within the Lone Star state thanks to a set of arcane auto dealer protections already on the books (and which no one has lifted a finger to remove). The Texas law requires that automakers have a licensed dealership in the state, but Tesla sells direct and has no dealerships anywhere. Hence, a titanic stalemate.
Unable to facilitate direct sales in the state, Tesla has created display “galleries” in Austin and Houston, but it is not allowed to offer test drives to prospective buyers or even give them pricing information.
In addition, Tesla owners who need servicing must enter a strange world, reminiscent of the military’s Don’t Ask Don’t Tell policy, in which the Tesla owner can call and discuss the repair issue on the phone with experts at Tesla HQ in California, but not with specially contracted Tesla repair centers in Texas. These Texas subcontractors can perform warranty work on the cars, but they are forbidden from discussing the repairs with customers or from advertising that they service Teslas. They send their bill to Tesla in California, which pays them.
Even Gov. Goodhair, as the late Molly Ivins fondly called him, couldn’t two-step his way around the thorny fact that it’s just plain hard to buy a Tesla in Texas.
And so, we’re unsurprised that Tesla announced last week that it will be locating its new battery plant in Nevada, which offered a rich package of financial incentives estimated to be worth more than $1 billion to the company over the next decade.
The Nevada deal, which some critics say could be too rich for taxpayers in a state still struggling to recover from the mortgage/financial collapse, might have won the day no matter what the situation in Texas.
But Texas did come to the table with a good potential hand — it is home to 1 in every 10 car sales in the US, and a bevy of urban markets primed with Tesla buyers — that it forfeited.
Hey, sprawling Houston, Austin, San Antonio and Dallas-Fort Worth, don’t get too excited about the world’s top-rated EV, and the new iterations that are getting ever more affordable. You will just have to wait.
Because….contrary to the jingle, Texas’ markets aren’t Wide Open for Business. At least not to Tesla.