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Tesla’s stealth visit to San Antonio

May mean something, or it may not.

A pair of executives from Tesla Motors Inc., the electric carmaker that’s scouting a location for its planned $5 billion “gigafactory,” secretly met here Wednesday with top city and county officials, a person close to the discussion said.

The meeting came less than a week after the San Antonio Economic Development Foundation submitted a proposal to the Palo Alto, Calif.-based manufacturer for the factory, which will produce lithium-ion batteries for Tesla vehicles and battery storage units for use in homes, commercial sites and utilities.

While details of what local officials offered Tesla weren’t available, the proposal included a separate section for CPS Energy, positioning the city-owned utility as a potential partner for the company.

“It appears San Antonio is back in the game for the project,” the source said, acknowledging the city’s chances had seemed to be remote — until recently.

[...]

A Tesla plant, which the company wants producing battery packs within three years, would need between 500 and 1,000 acres with 10 million square feet of production space. The factory would create 6,500 jobs.

The company has said that with its partners, it plans to produce 500,000 lithium-ion batteries annually by 2020.

Late Tuesday, Castro used Twitter and Facebook to stake out his position on a state law that prohibits Tesla from selling its all-electric vehicles directly to Texas customers.

“Today, Tesla is prohibited from selling its cars directly to consumers in Texas. State law requires that they be sold through a dealer. I respect our state’s auto dealers, but that law ought to change,” Castro wrote on Facebook. “That’s like telling Apple it can’t sell its products at an Apple Store but has to sell them through Best Buy or Walmart instead. Makes no sense.”

In a Wednesday interview, he said he agreed with Gov. Rick Perry that the law should be changed. Lucy Nashed, a spokeswoman for the governor’s office, confirmed Perry has no plans to call a special session to address the issue.

It’s unclear whether that’s a deal breaker for Tesla. Arizona lawmakers currently are deliberating changes there that would allow Tesla to circumvent dealerships and sell directly to the public.

See here for the background. I will note that even if Perry called a special session to address this issue there’s no guarantee a bill would pass. The Texas Automobile Dealers Association pushed back pretty hard on this during the last legislative session, and they surely won’t go away any time soon.

Chances are excellent that Red McCombs could get Gov. Rick Perry on the phone.

So I asked the San Antonio billionaire last week if he’d called the governor about safeguarding the state law requiring automakers to sell their vehicles through franchised dealerships, the bedrock of McCombs’ empire.

[...]

As one of the state’s biggest auto dealers, McCombs has a dog in this fight, and he’s a big-time Perry supporter. Just since 2008, he’s written checks totaling at least $302,500 to Perry’s gubernatorial and presidential campaigns.

So the question about calling Perry didn’t seem weird. But it did turn out to be awkward, for me anyway.

A couple of long seconds of silence on McCombs’ end of the phone line.

Then the 86-year-old answered in a low rumble: “No … Why would I?”

In other words, he saw no need. In fact, earlier in the interview, McCombs had talked about the franchise law as immutable.

“That is as set in stone as it can be,” he said. “It’s as sacred as Paul’s letter to the Corinthians.”

[...]

Even with the tantalizing prospect of the gigafactory, [Rep. Lyle] Larson thinks a measure allowing Tesla to make direct sales in Texas would fail once again.

“I do not see the chance for an option allowing Tesla to sell direct,” he said. “I don’t see any appetite for it.”

Yeah, you could say that. Unlike the microbreweries, my go-to analogy for Tesla, the number of people that have used Tesla products is very small, basically negligible in comparison to the existing players. I just don’t think they have the lobbying muscle or the grassroots support just yet to overcome the resistance they’re going to get from TADA and the many people who will be naturally sympathetic to the status quo. I absolutely think it will happen eventually, but it will take time and outreach on their part to familiarize people with what they’re asking and why it’s a good thing. The battery plant story is a great start, but that’s all it is. Besides, as Jalopnik notes, the proposed factory Tesla wants to build is itself no sure thing. Assuming it is, Tesla is going to have to decide where to build that factory without any assurances from Texas that the laws about selling cars will be changed. There just isn’t the time for it.

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One Comment

  1. Bill Daniels says:

    I think the good people of San Antonio are fooling themselves if they think Tesla would seriously consider building a factory here when Texas has made it abundantly clear that crony capitalism is the order of the day. If Rick Perry and his minions were really serious about Texas being open for business, then it wouldn’t use legal strong arm tactics that would make the Teamsters of old blush. (Ain’t nothin’ gettin’ sold here, lessin’ it gets sold by a Texas auto dealer.)

    If I was a principal with Tesla, I’d tell Texas to pound sand and locate my factory elsewhere….and tell Texans exactly WHY they didn’t build in Texas. Actions have consequences and government picking winners and losers also has consequences.

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