Monday, 27 July 2020 18:29

Teslas from Austin Factory Will Have to Be Shipped Off-State Before Being Sold in TX

Written by Simon Alvarez, Teslarati


If everything goes as planned and if work on the site progresses at a similar pace as Gigafactory Shanghai and Giga Berlin, Tesla’s upcoming Austin factory could start producing Cybertrucks by the end of next year.

If Texas laws remain unchanged, however, the all-electric pickups would have to be shipped beyond state lines first, before they could be brought back for delivery to Texas-based customers. 


Such a detour sounds quite ridiculous, of course, but this scenario could actually happen unless Texas changes a law that prohibits auto manufacturers from selling new vehicles to buyers without the use of a franchised dealership.


Tesla is one of the few carmakers in the industry that does not use dealerships for its sales, with the company using a direct-to-customer internet sales model instead. 


This potential challenge was related by Wedbush Securities analyst Daniel Ives in a recent comment. According to a report from The Statesman, Ives noted that ultimately, “There are some hoops [Tesla] will have to go through” before it could sell its Texas made vehicles in Texas.


That being said, the Wedbush analyst also stated he does not see much of a problem since Giga Austin’s output will likely be substantial, and thus, the facility will be shipping vehicles to other areas of the U.S. 


Of course, it is also possible that even prior to the final decision of picking Austin as the site of its next vehicle factory, Tesla and Texas already had a deal that would allow the electric car maker to sell its vehicles directly to customers residing in the state. It’s very difficult to imagine Tesla and executives such as Elon Musk would be amenable to a direct sales ban, after all, since the company would be producing vehicles in Texas. 


This is especially true considering Texas actively sought out Tesla when the electric car maker was looking to establish a site for its Cybertruck Gigafactory. During a meeting among Travis County officials, Commissioner Jeff Travillion outlined the urgency for the approval of Tesla’s tax breaks, citing the risk of losing such a high profile project to other locations.

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