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Texas  + State of Texas  + Retail  | 
Texans Can Build Teslas But Not Buy Them

Texans Can Build Teslas But Not Buy Them

The Texas legislature wrapped up on May 31 and is on a break until 2023. However, it did so without making a change to Texas’ auto dealer franchise laws that would allow direct sales of Teslas, many of which will be built at its new Austin factory next year.

Under Texas franchise laws, which are similar to those in most other states, automakers such as Toyota and General Motors cannot sell cars directly to individual buyers. Automakers must sell cars to independently owned third-party businesses, i.e. new-car dealerships, which sell those vehicles to consumers.  

As it stands, Tesla’s company-owned outlets cannot legally sell cars in Texas or deliver any car within the state even if said car was bought by a Texas resident. Any Texas car buyer can go online and order a Tesla through the company’s website. But no orders may be placed or processed within any Texas facility owned by Tesla.

There are workarounds and some are even detailed on Tesla’s website. The company has more than a dozen Texas galleries where cars can be viewed, although staffers may not discuss prices. As a result, buyers have had to jump through hoops to actually take ownership of the new electric cars. Now, Tesla is on the verge of having to jump through the most surprising one yet: having to ship its Austin-built vehicles out of the state before it can sell (and ship) them back to Texas buyers.

This is not likely to change unless Gov. Greg Abbott calls a special session specifically to debate this topic or a regulatory exemption can be crafted for Tesla in the near future. Late last month, Tesla CEO Elon Musk weighed in on Twitter and says Tesla “sure would appreciate changing the law”.


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About Lisa Brown

Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM. In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.

  • ◦Policy/Gov't