Tesla Shuns Texas – No Electric Truck Factory For Lone Star State

JUN 11 2015 BY ERIC LOVEDAY 71

Tesla and Texas Aren't Exactly The Best Of Friends

Tesla and Texas Aren’t Exactly The Best Of Friends

Once again, Tesla Motors was shut out of doing business in the state of Texas.  Here’s Automotive News’ explanation of the current situation:

For the second time in two years, Tesla Motors Inc. is walking away in defeat from Texas after failing to convince lawmakers that it should be allowed to sell its $100,000 electric cars in the state.

Tesla had backed two bills in the Legislature that would have allowed it to bypass auto dealers and sell its cars directly to consumers in the second-largest U.S. car market. Neither made it to the House of Representatives or Senate floors for a vote. With the Legislature concluding on June 1, its bid is over.

“They are thwarting the will of the people,” said Diarmuid O’Connell, vice president of business development for Tesla, which is based in Palo Alto, Calif. “That it doesn’t even get a fair hearing — much less a vote — is to me very odd and disturbing.”

As expected, Tesla is not at all happy by Texas’ decision to ban its sales.  In a rather bold move, Tesla’s Diarmuid O’Connell, vice president of business development for Tesla, basically told Texas that the state’s chance of having an electric truck factory is now zero:

 “When we do a pickup, it would be logical that we would do it in Texas.  It’s logical to ask why would we invest major amounts of money in a state where we can’t even do business.”

Two years ago Tesla CEO Elon Musk had suggested that Texas would be the logical place to build an all-electric truck.  He’s floated the idea around several times now, but with Texas once again shunning Tesla, the electric truck factory ain’t going to be located in the Lone Star state.  That is, unless Texas changes its stance on direct sales.

Source: Automotive News

Categories: Tesla, Trucks

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71 Comments on "Tesla Shuns Texas – No Electric Truck Factory For Lone Star State"

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David Hrivnak
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Tennessee a very pro EV state with many existing automotive manufacturing plants would be more than happy to build an EV truck. We are already home to the Nissan Leaf.

Brian
Guest
Brian

They build F150 engines up here in Cleveland… If they want to come this way I’d be all over that as well.

If states don’t want Tesla sales tax they won’t get Tesla income tax!

See Through
Guest

ROTFLMAO. Truck factory? Gigglefactory no. 9? What else will this guy throw out to get freebies, subsidies and backdoor entries into bending and twisting the laws?
Even if there is the hypothetical truck factory, how many trucks will they sell? GM and Ford each sell 50000 & 60000 trucks every month in US. Will Tesla sell 100 trucks?

Dave K.
Guest
Dave K.

If Tesla builds a truck it will sell like hotcakes, many businesses use them and drive them a lot! The low operating costs will make sense, especially if they can get down in the $40K range…

Barry Goldwater
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Barry Goldwater

See Through: I’d love to place a bet with you about internal combustion vs. EV usage in ten years. I wonder if Henry Ford had the same bet with supporters of Stanley Steamers? (You don’t seem overly “informed” about the progress of technology and consumer acceptance rates.)

philip d
Guest
philip d

“For the second time in two years, Tesla Motors Inc. is walking away in defeat from Texas after failing to convince lawmakers that it should be allowed to sell its $100,000 electric cars in the state.”

I hate how this kind of price quoting is used consistently by media outlets almost in a derogatory way. This should read: “..it should be allowed to sell its $75,000 electric cars in the state”

Tesla offers different versions of the S with different levels of performance and different options just like every other automaker but for some reason they always choose to quote a much higher price from the performance models rather than the base starting price.

Let’s see how this would sound if we substituted a more popular, familiar car.

“For the second time in two years, Daimler AG is walking away in defeat from Texas after failing to convince lawmakers that it should be allowed to sell its $100,000 E Class cars in the state.”

Yes it’s true that Mercedes makes the Mercedes-Benz E63 AMG which costs $100,000 but the base E Class sedan starts at $53,000. So why would a journalist plug in the $100,000 number unless they wanted to be sensationalist.

Londo Bell
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Londo Bell

I’m not the writer, so my respond to you doesn’t represent the writer’s view.

However, the answer to your question is relatively easy.

Yes, there’s a starting price for Tesla Models S. The problem is that it’s quite difficult to get that specific model from Tesla without a long”er” wait, as its priorities are usually and very often the higher end, hence higher cost, models. In fact, most Tesla you see on the street are north of the $75K price.

Thus, it’s meaningless to say a $75K model here, because chances are, most won’t buy it, or realize that it is being offered (due to the reason above).

This also answer your part on the E-Class, because the E63 model is not a model you can just buy and drive away in a MB dealership, and that most E class on the street are NOT E63, but the E350 (again, due to availability and popularity). Thus, when quoting E Class price, the price is usually on the E350.

Ed
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Ed

Not true. At the annual shareholder meeting this week Tesla said the 70D model (the least expensive of the three versions) was about 1/3 of all sales.

Yes a P85D would be delivered faster, but most people order the car they want based on price and features, not which one would be delivered a few weeks earlier. If someone needs a car right away there are a few inventory cars for purchase and the CPO program.

David Murray
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David Murray

Yeah.. I see both sides to that argument. While it is true you can buy a Tesla for $75,000. I get the impressed VERY few are sold in that price range. Apparently anyone who can afford a $75,000 car can also afford a $100,000 car. As such, most people will opt for the higher end model.

philip d
Guest
philip d

Agreed, but the perception is that the Tesla is a $100K+ car when it’s not. If you ask the average person how much a Tesla costs I guarantee you because of how the media portrays it most will guess $100k+.

In my own experience I find that people are surprised when they find out there is more than one model of the S offered and that it starts at $75K.

You will also almost always see that when a Tesla is compared head to head with other luxury sedans they will use a P85D with all the options. Then at the conclusion they will say something like how the Tesla is great but might not be worth the $125k price tag compared with the $80-$100k models they are comparing them against.

Acevolt
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Acevolt

I just ordered a 70D two weeks ago for $83K before incentives ($73K after incentives in California) and I would not spend $100K on any car. I think a lot of people are buying the 70D and spending around $75K after incentives. It also has a delivery date of late June, so its not taking any longer than the more expensive cars.

Ryan
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Ryan

The problem here is that 90% of Americans spend less than $20k on their cars and to them $75k and $100k are pretty much the same thing.

Lensman
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Lensman

The average selling price for Model S is about $100k, not counting any government rebates or incentives… which some people get, and some don’t. I don’t know why you’re complaining about an accurate statement.

Sure, it’s possible to buy a car for the MSRP, which is the absolute minimum price at which you can buy that car new (excluding incentives). But does anyone actually buy a Model S for that minimum price, the base trim level with no optional equipment at all? I don’t know, but anecdotal evidence suggests “no”.

philip d
Guest
philip d

Texas has shown that some of the top elected officials in the state will bow to the paranoia of a small minority of lunatic voters with the Jade Helm fiasco so it is unlikely that they will stand up to a more powerful automotive lobby.

Those specific politicians, the Governor of the state being one, have made it very clear that self preservation of their careers are all that matters.

Clif J
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Clif J

and as for CT?

ffbj
Guest
ffbj

Just as we thought.

John in AA
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John in AA

Definitely a bummer. I do have to say though, threatening retribution by withholding a nonexistent electric truck is not exactly going to make the Texas legislature quake in their pretty high-heeled boots. When and if Tesla gets around to building such a thing, it will inevitably be after the Model 3, and that’s a long time from now, especially in election cycles. Everybody will have forgotten their threats and promises by then.

Marshal G
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Marshal G

I don’t think it was a negotiating tactic, I think they really mean it. It’s something we’ve said should happen but to hear it stated publicly by a Tesla VP is shocking and shows just how frustrated they are with Texas.

James
Guest
James

Oh the ole-boy-network in Texas is mighty strong!

I think Musk should dangle a rather large campaign contribution in front of Gov. Perry’s nose about now. This is how it works these days – so sad to say.

The truck lure is weak to be sure. Musk can’t just mention a truck now and then and suppose people will take him seriously. That said, Texas is the perfect place for a truck plant. I’m too busy at the moment to look up truck sales in that one state – but I would venture to say they sell the most trucks there of all 50.

Texas will fold, eventually – but let’s not hold our breath. good ole boys been greasing each other’s palms for well over a century. It would be great for an all-electric fullsized truck to come out of Tesla someday. If and when it does – building it elsewhere would serve them right.

Rick Danger
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Rick Danger

I would love to see SpaceX pull out of Texas as well. Probably never happen, but I would still love to see it.

Anon
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Anon

+1

Texas is a whiny bitch that needs its conservative republican ass kicked…

Rick Danger
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Rick Danger

+1 Well said!

See Through
Guest

I would love to see SpaceX use batteries, and not burn tons of Texan oil and use Hydrogen “fool” cells.

Steven
Guest
Steven

Can you itemize specifically where and how SpaceX uses oil sourced from Texas?

No?

Didn’t think so.

Barry Goldwater
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Barry Goldwater

The rockets of SpaceX, likely use liquid hydrogen and oxygen. Not oil from Texas or anywhere else. (Why are you posting here? This is a forum for people knowledgeable or interested in EV technology.)

“Fool” cells? (Are you a Repukelican or a Libtard?) This really lowers the level of discussion to somewhere around 3rd grade ala Fox News.

martinwinlow
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martinwinlow

https://en.wikipedia.org/wiki/Merlin_(rocket_engine_family)

*Kerosene* and oxygen… although, most hydrogen (which is steam-reformed from natural gas) comes from the usual Big Oil suspects as well. You just can’t get away from those ghastly oily-garchs! MW

Speculawyer
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Speculawyer

Texas is pretty corrupt and controlled by oil & gas and car dealerships. Their ‘free market’ and ‘local government is best’ supposed principles are just window-dressing when in reality they ban Tesla retail stores due to the car dealership cartel and ban local anti-fracking laws.

They should be careful. Do they want to end up defending a dying industry to the death like Kentucky?

Rick
Guest
Rick

The oil industry in Texas isn’t dying any time soon. Certainly not within the current election cycle.

Clif J
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Clif J

Man, those conservatives in New Haven and Hartford deserve the same thing.

NorCalEV
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NorCalEV

No kidding right?

And California DESERVES to lose the gigafacyory to Nevada !

Marshal G
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Marshal G

Me too but they got a great deal on an already built space complex, and south Texas is the closest you can get to the equator without leaving mainland US, so, probably not going to happen.

Ian
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Ian

Florida

Waiting
Guest
Waiting

The hell with Texas. With that much oil in the state, they will never do anything to promote EV’s. So screw Texas. Tesla needs to stop trying. Just sell your cars via the internet to Texans as you do in other states. If Texans want to test drive a Tesla and they want it bad enough, they will go to another state and make it happen. After all, we are talking about people who have some spare change in their pockets.

John in AA
Guest
John in AA

I’m sure Tesla will continue to do exactly what you say, but I’m also sure the lack of local footprint will continue to hurt them. It probably hurts them more in Texas than it would anywhere else in the Union, because of the state’s size. Here in equally-benighted Michigan, at least I can reach a Tesla showroom or service center with a few hours driving. You can barely get from one side to the other of the Houston metro area in the same time it takes me to get to Chicago, Cleveland, or Columbus. Well, I exaggerate, but not much. I wonder how Tesla takes care of their customers’ service needs in Texas.

sven
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sven

Texas, also generates by a huge margin the most wind power of any state. There might still be hope for Texas.

http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_17_a

Josh
Guest

My wife test drove a Model S last month here in Houston. They just couldn’t talk about ordering or pricing.

The perception of the difficulty is stronger than the actually difficulty of getting a Tesla here.

John in AA
Guest
John in AA

Thanks for that. I see that per Tesla’s map, Texas is in fact well-supplied with galleries and service centers. So I withdraw my earlier comment that Michigan is “equally-benighted”. We’re much more benighted, since (if I recall correctly) the crazy anti-Tesla statute our legislature recently passed forbids Tesla from opening even a service center. Which is flat-out anti-consumer and I wonder if it would survive a legal challenge, but that’s another story.

kubel
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kubel

“They are thwarting the will of the people. That it doesn’t even get a fair hearing — much less a vote — is to me very odd and disturbing.”

It may be disturbing, but is it really that odd? We are talking about politicians here. More often than not, politicians are corrupt self-serving opportunist liars and thieves. You have to be really naive to believe politicians represent the people!

Rick
Guest
Rick

Are they thwarting the will of the people? Or the will of Elon Musk?

Aaron
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Aaron

The people. Texas makes it difficult to purchase the Model S. Elon doesn’t care either way — he is happy selling the Model S online or at a boutique store at the mall.

Stimpacker
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Stimpacker

The will of the people?

How about denying Americans a car that is made in America, by Americans and by an American company?

The GOP has somehow associated Tesla with Obama due to the loan Tesla got. Politics being what it is, they forgot that the GOP is also pro-America.

Lad
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Lad

No, the GOP is proGOP; they could care less about America.

Big Solar
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Big Solar

+1

Lensman
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Lensman

Elon doesn’t care either way — he is happy selling the Model S online or at a boutique store at the mall.”

I rather doubt that Tesla is spending money lobbying Texas legislators and the Governor’s office because Elon Musk “doesn’t care” whether or not Texans can only buy a Tesla car online.

Tesla cares quite a bit about a State which represents a significant population, a good portion of which are quite rich; a State which contains a significant concentration of hi-tech businesses in the “Silicon Hills” area in Austin.

There are a lot of potential customers for Tesla in Texas.

See Through
Guest

Lensman, I give you a +2 today for this unbiased comment.

mo
Guest
mo

It is so hypocritical that Texas which prides it self on free market dynamics and conservative principles can be bought out by the Auto dealers lobbying group (NADA). It is very ironic that a state where Texans are adamant that no one can tell them what to do, is bends the knee to NADA rather than respecting the will of the people. Conservatives in this country complain constantly for free markets; except of course when bribed by THEIR lobbying groups.

Marshal G
Guest
Marshal G

26 years after Tienannmen Square a car buyer in Beijing has more rights than a car buyer in Texas.

Open-Mind
Guest
Open-Mind

Yeah China is awesome. Except for freedom of speech, freedom of the press, freedom of the internet, freedom of association, freedom of movement, freedom of religion, freedom to have children, etc.

And China only has five Tesla dealerships.

Marshal G
Guest
Marshal G

I was obviously referring to the buying a car. Nice snark though.

Open-Mind
Guest
Open-Mind

Not a snark. You stated (in the context of Tienannmen Square) that car buyers in China have more rights than car buyers in Texas. That’s absurd and offensive.

Buying a Tesla-vehicle at a Tesla-dealership is not a “right”.

A great situation? Yes
A great opportunity? Yes
A great privilege? Yes
A great convenience? Yes
A person’s right? No

Trace
Guest
Trace

Don’t forget free of MSG!

bfearn
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bfearn

Yeah right, you have obviously spent years living in China.

Hastings
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Hastings

Idiots!

Rick
Guest
Rick

“…with Texas once again shunning Tesla, the electric truck factory ain’t going to be located in the Lone Star state. That is, unless Texas changes its stance on direct sales.”

Or unless Tesla changes its stance on dealerships.

electric-car-insider.com
Guest

I predict that after the Model 3 becomes the most successful new car introduction of all time, and Texans do not get easy access to the Future of the Automobile, the Lone Star legislators will start whistling a new tune.

Either that or UPS is going to need bigger trucks…

Tony Williams
Guest

It’s going to be hard to pass up the other “Model” car, the Model T.

I suspect Model 3 won’t do that.

MDEV
Guest
MDEV

Can California as state sue Texas for not allowing an American Californian company to do business under inter state commerce regulations?

Lensman
Guest
Lensman
I am not a lawyer, and it seems unwise to say “never”, given the number of frivolous lawsuits which some idiot judges have allowed to go forward. But I think it unlikely that a Federal court would agree that the State of California had legal standing to sue the State of Texas in such a case. After all, a citizen of Texas can buy a Model S online, he can license it and legally drive it on public roads in Texas. He just can’t buy it directly through a Tesla store located in Texas. So how does Texas restricting sales of the Model S cause any damage to the State of California? I don’t think California has any standing, because no damage (defined broadly) can be demonstrated. California certainly would have standing if the State of Texas refused to allow Model S’s to be shipped thru their territory to be sold in another State, or if Texas imposed a tariff on sales of Model S’s. Either of those would be restricting interstate commerce, which would give standing for California to sue Texas. But Texas isn’t doing anything to restrict interstate commerce, at least not in any way which the courts… Read more »
QCO
Guest
QCO

Funny you should use that example, because Costco and others are legally challenging another Texas law that says spirits can only be sold by non publicly traded companies, eg the old boy’s privately owned liquor outlets.

Never underestimate the silly things that go on in a socially backward place like Texas. However, as more modern people move to Texas under their “open for business” initiatives, things will eventually change.

Lensman
Guest
Lensman

Okay, but the original question was about interstate commerce and how that might be legal grounds to sue the State of Texas over its refusal to let Tesla do direct sales from its stores in the State.

Costco (or actually Wal*Mart, according to my Google search) suing the State of Texas over liquor sales will be handled by State courts, not federal courts; it’s not an interstate issue.

Clif J
Guest
Clif J

Yeah, nothing crazy about alcohol retailing laws in PA or VA…

Lensman
Guest
Lensman

It’s disappointing, but hardly surprising that in Texas, which is controlled by a politically very far-right Legislature and Governor, that they again rejected Tesla’s attempts to sell cars in Tesla stores in the State. Doubly so when the outgoing Governor (Rick Perry) and junior Senator (Ted Cruz) have their eyes on the current Presidential race.

I very much hope that Tesla sticks to its guns (that metaphor seems particularly apt for Texas) and refuses to invest there, unless and until Texas agrees to compromise.

Is it a negotiating tactic on Tesla’s part? Well of course it is! But that doesn’t mean Tesla is bluffing. Hopefully they’ll play hardball.

Open-Mind
Guest
Open-Mind

Wouldn’t the traditional right-wing position be to support free-market capitalism by eliminating pointless rules and regulations that restrict competition?

IMO, the politicians blocking Tesla may be Republicans, but they are not right-leaning on this issue.

Trace
Guest
Trace

No. It wouldn’t. Republican rhetoric and republican actions once in office are two different things.

Lensman
Guest
Lensman

Open-Mind asked:

“Wouldn’t the traditional right-wing position be to support free-market capitalism by eliminating pointless rules and regulations that restrict competition?”

Sure, but the traditional right-wing were true conservatives, actually adhering to true conservative principles; not the fake conservative extremists who have created a far-right bubble world echo chamber, largely ignoring reality, by taking over and dominating the current right-wing political scene via talk radio, Faux News, and the nominating process of the GOP party.

But the far-right political grip on Texas won’t last much longer; it’s basically on its last gasp. Demographics are changing rapidly, and it won’t be long until the Democrats have such a large majority there that even the far-right entrenched in the State legislature will no longer be able to impose its minority will on the majority.

minivanjack
Guest
minivanjack

As Texas disconnects from Federal controls, intimidations and unlawful state meddling and demonstrates it’s respect of Constitutional provisions, Tesla would not exist without Federal subsidies. Taxpayer subsidies are a fundamental element of Tesla’s existence. There is a striking and fatal moral divide between how Texas and Tesla do business. When our government devotes its resources to selectively subsidizing its “partners” and destroying free enterprise, it is best that we all, not just Texas, disconnect from the “Federal” monster.

G2
Guest
G2

So, Texas isn’t about Freedom, Capitalism,& Individual Rights, but about Protectionism, Oligarchy, and Suppression?

Is there a better example that Big Oil is against the American dream?

G2
Guest
G2

Minivanjack; Big Oil is heavily (in the hundreds of billions) subsidized by taxpayers through provision of Federal lands, preferential tax structures, lax environmental regulation, and forgiveness of environmental disasters (Alaska/Gulf of Mexico/Great Lakes etc etc etc).
Don’t wrap the flag in an industry that turns the political process against the people whom it is meant to serve instead of the Oil Oligarchs. Step back and re-examine.

Mark C
Guest
Mark C

I would be just stubborn enough not to EVER build a factory in Texas. Here’s the thought, 52 miles away from Kenton, TX is Branson, CO. Colorado is, and has been quite pro-EV while Texas is pro-GoodOldBoysClub. I’d let them see that geographically, they missed out by less than 100 miles.

Doug Nusbaum
Guest

do not forget that in texas f**** are not people. Tesla is a high tec company with young intelligent (not faith based) people as employees. this may be another reason that Tesla does not do much business in Texas. I suspect that there are many similar reasons. Like the hostility to the idea that a womans body belongs to her and not the state for example.

Wayne
Guest
Wayne

I’m not American so from an outsider’s view this whole thing looks crazy. You have a great American invention and business and yet part of your own country seems to be blocking it from going on sale to a big portion of the population.
So much for being the land of the free!