Culture

Tesla’s spite-move to Texas may not have been such a clever idea, after all

A law dictating that it can’t sell directly to consumers in the state has no chance of changing before 2023.

CEO of Tesla Motors and SpaceX, Elon Musk speaks at the Texas Transportation forum in Austin on January 15th, 2015 (Photo by Robert Daemmrich Photography Inc/Corbis via Getty Images)
Robert Daemmrich Photography Inc/Corbis News/Getty Images

Tesla’s new Texas factory has hit a significant snag in its production line: the electric cars will actually have to be shipped out of Texas before being sold to consumers. Texas state laws require that manufacturers must first sell their cars to third-party businesses before then being sold to consumers — which means Tesla can’t sell its own cars at Tesla showrooms (h/t The Drive).

Right now, Tesla works around this law by allowing potential buyers to visit Texas showrooms and then directing customers to purchase their vehicles online. It’s a solid workaround, all told; as long as the order itself isn’t technically processed in Texas, both the consumer and Tesla are obeying the law.

This will prove to be much more problematic once Tesla is actually manufacturing its vehicles within Texas’ borders. Housing its major factory in Texas should have opened up Tesla’s business there, allowing customers to drive cars right off the lot and into their garages — but now it’s looking a lot like Tesla’s going to be forced to do much more circumvention than it planned for.

Seems like Tesla’s SOL — Tesla didn’t go into the building of its new factory completely blind to the situation at hand. The company seems to have been banking on a new bill (HB 4379) introduced by State Representative Cody Harris in March that would have explicitly allowed for Tesla to sell cars directly to consumers in Tesla.

The bill was heard by the Texas state legislature on May 11, according to The Drive. But the bill did not manage to get any further than that initial hearing, and the bill had a deadline of May 13 for passing. So now it is no more. And here’s the kicker: the legislature in Texas won’t meet for another two years. Yep, Texas lawmakers only meet for 140 days every other year. Barring some last-second Hail Mary from the state’s governor, there’s zero chance Tesla will be able to sell its vehicles directly in Texas.

Elon weighs in — Tesla hasn’t made any official statements about the Texas problem, but we have the next best thing. Elon himself responded to The Drive’s article on Twitter last week. He says Tesla “sure would appreciate” changing the law.

Tesla’s new legal hurdle is particularly laughable given that CEO Elon Musk’s big draw to Texas in the first place had to do with legal problems Musk faced when attempting to re-open Tesla’s Fremont, California factory toward the beginning of the COVID-19 pandemic. At the time, Musk threatened to leave California entirely for Texas — and, in doing so, he’s accidentally run into a slew of new problems.

Tesla’s new Texas factory should be up and running by the end of 2021. Just don’t expect to walk up and buy one on the spot.