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Tesla

Third time for Tesla

If at first (and second) you don’t succeed

Tesla is not giving up at the Texas Capitol. In fact, it’s getting more ambitious.

Instead of looking to create any kind of carve-out that favors the high-end electric car maker, legislation filed Friday would simply allow any vehicle manufacturer to sell directly to Texans — bypassing the middleman dealers — in Tesla’s biggest challenge yet to a longstanding state ban on the practice.

The proposal “will allow manufacturers of vehicles any weight, class, size or shape to sell direct to consumers,” said state Rep. Jason Isaac, the Dripping Springs Republican who filed the legislation in the House. “It’s a simple, free-market bill to allow that to happen.”

State Sen. Bob Hall, R-Edgewood, is carrying the legislation in the upper chamber. He and Isaac filed their bills, Senate Bill 2093 and House Bill 4236, on Friday with hours to go until the deadline to submit legislation for the biennial session.

[…]

Dealerships have long argued the Texas direct-sales ban protects customers by ensuring that they have locations where they can buy cars across the state, not just in highly populated cities where manufacturers, if given the chance to sell directly, might otherwise set up shop. The opposition to such legislation also has an ally in Gov. Greg Abbott, who said after the 2015 session that Texas’ automobile sector seems to be “working quite well the way that it is.”

“Tesla’s legislation seeks to unravel the entire franchised dealer system in Texas, in favor of direct sales of motor vehicles by a manufacturer,” Texas Automobile Dealers Association president Bill Wolters said in a statement Friday. “SB 2093 and the reduced competition it will bring about in the new vehicle sales and service market will come at the expense of Texans and Texas.”

“No other vehicle manufacturer is seeking to change the law, and Tesla doesn’t need to either,” Wolters added.

For Isaac, the issue goes beyond Tesla. He recalled having something of an epiphany after recently touring an Amazon facility in Texas and seeing robots zip around with pallets: What if similar technology could one day be used to haul containers up and down the state’s highways?

“I really believe in the next 10 to 20 years we are going to see a complete change in our transportation system,” Isaac said, “and the last thing I want is any barrier to that technology being available.”

See here for previous Tesla blogging. I side with them on this, though as before I don’t expect them to overcome the resistance to their business model. (Neither does bill author Rep. Isaac, but I agree with his assertion that it’s worth having the conversation.) I love how Greg Abbott has sided with the legacy system here. It’s an apt summation of his vision and purpose. Anyway, as with driverless cars, this has been going on since 2013. It’s beginning to feel like a tradition making note of these bills each session. I just hope it’s a tradition that eventually has an end.

Tesla tries another approach to getting access to Texas

If at first you don’t succeed, change your strategy.

Tesla Motors’ Lone Star ambitions won the blessing of the Texas GOP at the party convention in Dallas this month, paving the path towards a possible end to the three years of drama over the electric car manufacturer’s right to sell in Texas.

It’s a dramatic incremental victory for Tesla in Texas, the nation’s second-largest auto market, coming less than a year after the state’s top Republican, Gov. Greg Abbott, told Bloomberg that Texas wasn’t interested in the California car company’s direct sales.

[…]

The coming 2017 session seems poised to provide a breakthrough for Tesla, now that the company has courted the sentiments of Texas republicans.

With a booth at the party’s state convention in Dallas in May, a Tesla rep argued that repeal of franchise law amounted to a truer free market system. And the party agreed, adding a Tesla-friendly plank to its 2016 platform.

“We support allowing consumers in Texas to be able to purchase cars directly from manufacturers,” the addition said.

That will make it very hard for the state’s ruling party to continue to resist the years-long push when lawmakers convene again in Austin in January.

See here, here, and here for some background. Tesla has tried logic, and they have tried lobbyists, so why not try platform management? I hadn’t seen Abbott’s remarkable comment to Bloomberg before now – gotta love that commitment to free-market principles – but if he’s not on board with this, that’s a potentially significant obstacle for Tesla to overcome. Not impossible, of course, but that’s a challenge. I’ve often compared the Tesla/auto dealers fight to that of the microbreweries and beer distributors. That took multiple sessions, and a significant amount of grassroots engagement for the microbrewers to win the fight, even if it was a mostly qualified victory. While this action by Tesla is a step in that direction, I still feel like they haven’t done enough of it yet. We’ll see how it goes when the Lege reconvenes.

Tesla takes its auto dealership fight nationwide

There’s more than one way to get into a market.

Tesla Motors Inc. hopes to capture mainstream auto buyers with its Model 3, an electric car it [recently unveiled] at a price about the same as the average gasoline-powered vehicle, but it may need a federal court ruling to succeed.

The Palo Alto, Calif., auto maker’s direct-to-consumer sales are prohibited by law in six states that represent about 18% of the U.S. new-car market. Barring a change of heart by those states, Tesla is preparing to make a federal case out of the direct-sales bans.

The auto maker’s legal staff has been studying a 2013 federal appeals court ruling in New Orleans that determined St. Joseph Abbey could sell monk-made coffins to customers without having a funeral director’s license. The case emerged amid a casket shortage after Hurricane Katrina. The abbey had tried to sell coffins, only to find state laws restricted such sales to those licensed by the Louisiana Board of Funeral Directors.

For now, Tesla is banking on a combination of new legislation, pending dealer applications and other factors to open doors to selling directly in Arizona, Michigan, Texas, Connecticut, Utah and West Virginia. But the company said it is ready to argue in federal court using the coffin case if necessary.

“It is widely accepted that laws that have a protectionist motivation or effect are not proper,” Todd Maron, the auto maker’s chief counsel, said in an interview. “Tesla is committed to not being foreclosed from operating in the states it desires to operate in, and all options are on the table.”

The ruling in favor of the monks, upheld by the Fifth Circuit Court of Appeals, could give Tesla the precedent it needs to join an “economic liberty” issue currently in dispute between circuit courts in the U.S., Northwestern University law professor John McGinnis said. The Second Circuit Court of Appeals, for instance, has upheld laws that require licensing to sell certain products even if there isn’t a clear reason for it other than protecting existing businesses from new competition.

[…]

Auto dealers are battle-tested and have notched a series of victories along the way. Earlier this year, the Second Circuit Court of Appeals refused to hear a case brought by auto makers that wanted to change laws using a similar constitutional challenge and involving warranty reimbursement levels.

Tesla could find powerful allies. The Federal Trade Commission has repeatedly said franchise laws are anti-competitive. Other organizations agree.

As we know, Tesla has tried and tried again to get a bill passed in the Lege to allow them to operate in their dealerless model, with no luck. I’m sure they’ll be back again next year, but in the meantime it can’t hurt for them to have a Plan B, especially if it solves the same problem for them in other states as well. We’ll see how this goes.

Dan Wallach: 2016 Electric Power Usage Update

Note: From time to time, I solicit guest posts from various individuals on different topics. While I like to think I know a little something about a lot of things, I’m fortunate to be acquainted with a number of people who know a whole lot about certain topics, and who are willing to share some of that knowledge here. In this particular case, I’m welcoming back someone who has written on this particular topic before.

We’ve now had a solar system on our house, and an electric car charging from the house, for just over a year. Also of note, in my post last May, I suggested that what we need is a retail electric plan that sells to you at a competitive rate (versus the inflated prices at Green Mountain) and buys from you at the wholesale price (which can climb impressively high on hot summer afternoons, when your solar system is cranking out the juice). Well, plans like this are starting to appear on the market. MP2 Energy has such a plan and others are looking into it.

Today, I want to discuss a few related questions:

  • How much electricity did our solar system generate, and our electric car consume, in the past year?
  • Based on our year of data, would we do any better to stick with Green Mountain or go to one of the newer plans?

Of course, I’m only writing about our own usage, with our house and our car. Your house and your car and your, umm, mileage will vary, but you might be able to extrapolate from our numbers to reach your own conclusions about whether you want to go solar.

How much electricity did our solar system generate?

Below is a graph of the energy-per-day produced by our solar array. You can see the system generating more energy in the summer months, with the correspondingly longer days. You can also see the occasional days with bad weather. No sun = no power.

Dan Wallach 2016 chart

In total, over this twelve month period, our solar array (36 panels, 250W peak production per panel) produced 10.3 MWh of electricity. At the $0.12/kWh buyback rate we’re getting with Green Mountain Energy, that means that our solar array saved us roughly $1240 this year. (Our panels are facing east and west, as a result of the way our roof is built. If your house has a large southern-facing roof, you could get this much power from fewer panels.)

How much juice did our Tesla consume?

According to the Tesla’s dashboard measurements, after a year of owning it, we’ve driven a total of 7033 miles, and used 2476 kWh to do it. That’s 352 Wh/mile. Assuming you were paying $0.10/kWh for your electricity, then we’re talking about 3.5 cents/mile. Contrast that with a comparably large sedan with comparable performance (e.g., an Audi A7), doing the same sort of city driving and thus getting something crappy like 15 miles/gallon, then with current $2/gallon prices, you’re looking at 13.3 cents/mile. You’d have to have some kind of amazing 57mpg  hybrid to achieve the same cost per mile. (A Prius is almost there. Big luxury cars, not so much.)

Another way to think about it: the “long tailpipe” problem. Some critics of electric cars note that they still burn fossil fuels, just somewhere far away from home. Our solar array produced enough energy to run our Tesla for nearly 30,000 miles. So if you want to have a “solar powered electric car”, you can do it with even a modest-sized solar system.

What if you drive a longer commute? The prior owner of our Tesla lived up in the Woodlands and commuted back and forth to Houston. He was averaging an even more amazing 300 Wh/mile, driving twice as many miles per year in the same exact car. He upgraded to a Tesla P85D (the four-wheel-drive version that goes insanely faster) and his mileage stayed roughly the same. Supercar performance, tiny hybrid efficiency.

All that said, I don’t have a really good handle on the overhead of the Tesla. Sure, it consumed 2476 kWh in the past year, but that’s going from the car’s battery to the tires. There’s some fractional overhead beyond that, going from the wall outlet to the car’s battery. Charging a battery creates heat, which represents wasted electricity, and also requires additional energy to remove. The Tesla will thus use extra power to run the A/C compressor while it’s charging. For now, let’s just say that measuring the charging overhead is future work. (Hey OffTheKuff readers: if you’ve got measurement infrastructure that I could borrow for this, let me know!)

Lastly, I’ll note that we did several road trips in the Tesla, using their Supercharger infrastructure. I’d estimate that somewhere around 500 kWh of that energy was “free” from the Supercharger network (i.e., included in the cost of buying the car).

Should we stick with Green Mountain or switch elsewhere?

Green Mountain has the best net metering plan on the market, but there are only two competitors. In a nutshell, Green Mountain buys and sells power from you at the exact same price: $0.12/kWh, inclusive of all fees and taxes. But there are plenty of standard retail plans that will sell you electricity at $0.08 or $0.09/kWh. Can we do better than Green Mountain’s net metering plan? The real issue, once you strip away all the dumb politics, is that the underlying pricing model isn’t at all a flat rate for electricity.

Roughly speaking, there’s a wholesale price for the electricity coming from a commercial generator and then there’s a distribution price to get it to you. Wholesale prices vary all day long, with overnight lows below a penny and mid-afternoon highs as much as 3 cents/kWh, with occasional peaks that are much, much higher. CenterPoint charges 3.8 cents/kWh for delivery of that power, no matter what, alongside a flat monthly charge of $5.47 per residential customer. All those charges are often rolled into the pricing plans you see from other retail electricity providers, who are essentially gambling that they can buy power at variable wholesale rates and sell it to you at a flat retail price while still somehow making a profit.

When a retail electricity provider wants to get into the solar buyback game, their actual costs to get power downstream to your house (so far as I can tell) are the wholesale price plus the distribution price. Your excess solar power production is worth the same to them as the spot wholesale price when it flows back upstream. CenterPoint doesn’t give any sort of rebate for upstream electricity flows. CenterPoint’s argument: Somebody else is receiving the power you’re sending upstream, and they’re paying to get it delivered. CenterPoint charges for that delivery.

Can a retail electricity provider offer a competitive pricing plan that’s closer to the wholesale market structure while still buffering consumers from the sometimes insane spikes of the raw wholesale market? One such provider, who prefers not to be named yet in public, approached me privately and offered me the chance to test drive a new plan they’re working on. Their proposal is to pass through all the CenterPoint charges, as is, and then have a flat 3 cents/kWh for buying and selling power, downstream or upstream. I ran these numbers through my spreadsheet for the same 12 months of data I’ve already captured. Here’s what came out: Green Mountain’s $0.12/kWh net metering plan cost us $692.84 for the year. If we had this new plan instead, it would come out to $712.07 for the same usage in the same year.

Evaluating MP2’s spot-price “solar buyback” plan is a bit more complicated, because the upstream price they pay you varies all day long. Conveniently, MP2 did this analysis for me. I emailed them all our data and their conclusion was that our annual bill would be $904.32, so not especially competitive with Green Mountain’s net metering. MP2 also offers a net metering plan, similar to Green Mountain’s plan, but it’s presently offered as part of getting your solar system installed through SolarCity. Thus, not an option for us.

Call me modestly bullish on this. Even though MP2’s solar buyback plan isn’t a good deal for our house, other firms are looking to offer variants on the same business model that are competitive. As an added bonus, I’d now be incentivized to put a big battery on our house to capture the excess daily production and reuse it at night. With standard net-metering, there was no incentive, but now I’d save those distribution charges. I’ll still wait for the cost of battery packs to drop, but it’s fun to think about.

Some Thoughts About the Future

There are always going to be a few days in the summer where the demand on the grid peaks out. In those cases, all the market-rate adjustments in the world won’t cause a new industrial generator to be constructed and placed online. That means high prices and brownouts. (If anything, there’s a reasonable fear that generators might deliberately go off-line to force price spikes. That’s beyond the scope of today’s post.)

Solar has a big role to play in stabilizing our grid, because those hottest hours of the day are exactly when solar panels will be generating the most power. Solar also happens to do the job without pollution, and without incurring large infrastructure costs for long-distance power distribution. On top of that, solar’s one-time purchase and installation costs are rapidly shrinking.

Consequently, it’s sensible and desirable for the Federal government to continue its solar subsidy, and it would make a lot of sense for the Texas state government to get in on the game as well. The solar on our roof helps our neighbors, not just us. I’m not suggesting that we’ll stop burning fossil fuels, but rather that a diversified set of sources is a desirable way to meet the needs for a stable and scalable power grid.

The biggest objection to solar, so far as I can tell, comes from shills who misrepresent the financial structure of the electricity markets and claim that residential solar production leads to “mooching” off the grid. What I like about MP2 and some of the other buyback plans coming online is that they address this concern head-on. By passing through the monthly CenterPoint connection charge and pricing power consumption somewhere only marginally higher than wholesale rates, these new plans make it clear that solar systems aren’t mooching at all. They’re paying their fair share, and they’re improving the reliability of the grid while they’re at it.

Still more hyperloops

They had a hyperloop design contest at Texas A&M:

In the end, Elon Musk couldn’t resist showing up to the competition he helped inspire. The billionaire SpaceX CEO made a surprise appearance at the end of the Hyperloop pod design competition at Texas A&M University Saturday, eliciting a rapturous reaction from the thousand-plus audience of high school and college engineers who were there to compete for a chance to test their designs on Musk’s personal Hyperloop track later this year.

Massachusetts Institute of Technology’s team was awarded the top prize, and will now go on to build an actual pod to race on the under-construction track near SpaceX’s Hawthorne, Calif. headquarters. The Delft University of Technology from the Netherlands were the next runners-up. Auburn University won in the category of best overall subsystem. Twenty-two teams in all will go on to test their pods in Hawthorne, although up to 10 other teams could also qualify after further judging in the coming weeks, according to SpaceX.

Dozens of other winners in propulsion, design, levitation, and braking were also announced at the end of the two-day competition, which also featured technology demonstrations like Arx Pax’s hover engine, and a speech by US Transportation Secretary Anthony Foxx.

The event was meant to generate excitement among engineers and the public for the tube-based, transonic, vacuum transport system popularized by the billionaire Musk in 2013. But it was also meant to serve as a rebuttal to skeptics who dismissed the Hyperloop as too fanciful, impractical, and expensive to exist in the real world.

“The public wants something new,” Musk told the attendees. “And you’re going to give it to them.”

See here and here for some background. I still think this is all pie in the sky, but it is nice to think that there might be better ways to travel than what we have now. Maybe if this doesn’t work something like it will. Texas Monthly has more.

Abbott sides with auto dealers

Sorry, Tesla.

Giving a nod to long-established franchised auto dealerships, Gov. Greg Abbott says Texas doesn’t need to carve out a loophole in its laws that would allow Tesla to sell its high-end electric cars directly to consumers.

“Texas has a very robust, very open, very effective automobile sector that seems like it’s working quite well the way that it is,” the Republican told Bloomberg Radio on Tuesday. “If you’re going to have a breakdown in a car, you need to have a car dealership there to make sure that the vehicle is going to be taken care of. We haven’t seen that from Tesla.”

Tesla’s business model is to sell directly to consumers, bypassing the middleman dealers as it does in many states. But a longstanding law bars that practice in Texas.

[…]

Tesla has refused to call last session a failure. The company says it educated more consumers and lawmakers and will continue its fight to enter the country’s second-largest automobile market. And on Tuesday, it said it wasn’t discouraged by Abbott’s comments.

“As a growing company, we are optimistic about the governor’s pro-business position and hope to be selling direct soon,” Ricardo Reyes, a spokesman, said in a statement.

Abbott’s comments contrast with those of his predecessor. Last year, Gov. Rick Perry suggested in an interview with the Fox Business channel that the state’s dealership laws were “antiquated protections” that should be revisited. Those comments came as Texas was trying to entice Tesla to build its $5 billion lithium-ion battery plant here. The company ultimately chose Nevada.

See here for previous Tesla bloggage. They’ve struck out in the last two legislative sessions trying to get a bill passed to change the franchise model, with no one even sponsoring a bill last time. Abbott may be “pro-business” in some sense, but he surely knows where his bread is buttered. It will be interesting to see what if anything Tesla does in the next session.

More hyperloops

Gonna be the future soon.

Not content with simply sending men to Mars and conquering the automotive industry, billionaire Elon Musk has plans for a tubular transportation system that would dominate the globe.

The Hyperloop has been considered closer to science fiction since the idea’s introduction, but a new plan from the UCLA Architecture and Urban Design Suprastudio shows how the system could actually come together.

According to the UCLA presentation, “Hyperloop is a unique transportation technology based on centuries-old pneumatic tube principles, promising to provide ultra-clean, ultra safe, affordable, intra-urban travel at super-high speed.”

And while much of the report is centered on Southern California, particularly a Los Angeles to Las Vegas route, Texas’ megaregions feature heavily in the eventual Hyperloop plans.

Texas contains two of these “dense and interconnected centers of populations and economic activity.”

[…]

The report, which can be read in full here, put the Hyperloop system in its historical place and takes into consideration the current successes and failures of air and rail travel.

See here for the background. I don’t have anything to add here. I don’t expect this to amount to anything, though it would be cool if it did. Most likely I think people fifty and sixty years from now are going to look at this stuff and react to it the same way we do to “flying car” newsreels from the 1950s. The Trib has more.

Dan Wallach: 2015 Electric Power Usage Update

Note: From time to time, I solicit guest posts from various individuals on different topics. While I like to think I know a little something about a lot of things, I’m fortunate to be acquainted with a number of people who know a whole lot about certain topics, and who are willing to share some of that knowledge here. In this particular case, I’m welcoming back someone who has written on this particular topic before.

I’ve been blogging about our electricity situation for the past few years here at OffTheKuff. In 2014, I mentioned that we were pondering going with a solar system. Well, we did it — a 9 kW (peak) solar system via Texas Solar Outfitters — and we also picked up a Tesla Model S. This is less about being green hippie freaks and more about disconnecting from what I’ve viewed as a deeply dysfunctional electricity market. (And also having a car that kicks ass, but that’s for another day and a different blog.)

We’ve only had the solar system since November, so it’s too soon to have full-year statistics. Once the system reaches its first full year anniversary, I’ll run the “profitability” numbers and do another guest post here. Stay tuned for more exciting charts and financial math (present value, IRR, and more)! Instead, I wanted to give some perspective on the economics of solar power.

Notably, Tesla just announced a new “PowerWall” contraption that puts a 10kWh battery pack on your garage wall for $3500 (plus hiring an electrician, plus permitting, plus ancillary equipment like inverters, so let’s call it $6000 minimum). Elon Musk envisions that we can truly replace our entirely fossil fuel-based economy with solar power: homes, cars, everything. (For more technical details on the PowerWall products, Teslarati has a good writeup.) Let’s do the numbers, shall we?

To begin, here’s our March electrical bill from Green Mountain — the best of the three available plans if you have solar.

WallachElectricBill

This is what “net metering” looks like. We drew 862kWh from the grid and fed back 573kWh. Meanwhile, over the same time period, our solar system reports that it produced 853kWh. Of this, the house consumed 280kWh and we sold back the remaining 573kWh. So, our actual power consumption for March was 1142kWh (solar generation plus grid consumption, minus excesses solar generation sold back).

I rolled back to last year’s stats, when we had neither solar nor a Tesla, and the monthly usage for the same time period was 864kWh, which says that the Tesla used around 280kWh for the month, or maybe it’s just hotter this year. Last year’s awful summer peaks were well north of 1500kWh, so presumably this summer, with the Tesla, we’re looking at 1800-2000kWh / month of peak usage.

(With our Tesla, we’re on target to hit about 7500 miles/year, so these numbers may represent a “low” usage point relative to others, but you can easily scale our numbers up if you want to predict your own hypothetical costs. Your mileage and the weather may vary, etc.)

Here’s where solar gets fun. The graph below shows the energy generated by our solar system on a beautiful, sunny April day. Positive numbers represent power we’re drawing from the grid. Negative numbers represent excess power we’re selling back to the grid. You can see our Tesla charging itself up after we got home from eating dinner out. You can also nicely see when the sun came up and when it went down again. On this particular day, midnight to midnight, we drew 20kWh from the grid while the sun was down. The solar system generated 52kWh, and we had an excess of 44kWh that we sold back to the grid (i.e., we consumed a total of 28kWh on this particular day and were a net seller of electricity). Sounds great right?

WallachSunnyDayApril

The new Tesla PowerWall contraption leads you to ask the question of whether you could store all that extra energy in a battery during the day and release it at night. If you could do that, you could then cut yourself free from the grid. Today’s question: what would it take to go completely “off grid”?

To pull this off, you need to generate everything you might ever need, even in the worst case. So how bad is bad? Here’s a chart of our power usage over a two day period in early April when it was rainy and awful.

WallachRainyApril

Over these two days, our total power drawn from the grid was 46kWh. The solar system generated 25.2kWh, of which 9kWh was sold back to the grid (i.e., we consumed an average of 31kWh/day on these two days). To make this work “off grid”, we’d need to double the size of our solar system. To make this work on a bad weather winter day, with correspondingly less daylight, the solar system would need to grow yet again. Also, this included a typical day of driving with our Tesla. What if we did a long drive and got home with a near-empty battery? You’d have a whole new form of range anxiety to deal with. Conversely, on days when you generate more than you use you’re just throwing it away.

Our current solar system cost us roughly $30k to purchase and install (before the 30% tax credit, which might go down in future years). No matter how you slice it, the profitability of the system is dubious, given how much cheaper electricity became after the Saudis decided to crank up their production. Doubling the solar system, installing expensive batteries, going off-grid, and discarding excess production? Sorry, that’s not financially rational.

Incidentally, if you want to know how to size up a Tesla PowerWall system for an off-grid solar application, you pretty much just add up your grid consumption during the night; you need to ensure you have enough solar capacity and battery capacity during the day to cover it. For our house, two PowerWall batteries ($3500/ea, for 20kWh total storage capacity) wouldn’t quite do the job. We’d need three of them to have a decent margin. If you had a bigger house or you drove many more miles on your electric car, then you’d have to ratchet everything up appropriately.

Conclusion 1: building a solar system to deal with worst-case power generation, operating your house “off grid”, will require your solar system to be much larger than you’d specify for a net-metering application, where you can rely on the grid for bad-weather days. As solar panels get more powerful and cheaper, the economics of this will change. Today, no. Ten years, maybe.

Next question for today: is there any point in buying a PowerWall if not to go off-grid? If what you want is “emergency” service in a power-outage situation, you can buy all sorts of natural gas generators. They’re loud when running and they require regular service, but after Hurricane Ike knocked our power out for ten days, we could feel the soulful allure. Unfortunately, a smaller PowerWall system wouldn’t help here, since for a ten day blackout, you’re really in a situation equivalent to the fully off-grid scenario.

Sadly, with only flat-rate grid electricity pricing available here, I conclude that a PowerWall has no real use at our home.

Caveat 1: so long as TXU is willing to give you “free nights”, then a PowerWall means free electricity for your home! You can expect TXU to kill that program off quickly once Tesla’s battery packs start shipping. Sorry about that.

Caveat 2: electric utilities are cranking up the scare machine that it’s “unfair” for solar consumers to pay less for the grid. First off, this is totally bogus, as we pay the same fixed fee as everybody else pays for CenterPoint to maintain the grid. (Many retail electric plans hide this fee, so long as you use more than 1000kWh, but they’re still paying it on your behalf. ) And if you’re a net provider rather than net consumer of power at peak times, you’re helping the grid. But let’s say the utilities win the argument and kill off or weaken solar net metering. At that point, we’re forced to buy a battery storage system to recapture our excess daytime usage. The grid then loses the benefit of our excess generation, and every new solar system just got more expensive for no good reason.

All of this would change if consumers were more exposed to the variable pricing of the commercial power market. Rice University, for example, buys its electricity a full year ahead of time, hour by hour, offset by in-house solar production. If it turns out that Rice pre-bought more than they need, they sell it back on the spot market. If they need more than they pre-bought, they have to go buy power on that same spot market. And, of course, when do they really need it? The same time as everybody else does, on the hottest days, so spot prices can be brutal. With this in mind, typical commercial flat rooftop solar installations point their panels southwest, maximizing their power generation in the afternoon when electricity is most expensive.

The real genius of power storage systems is that you can buy and store the power when it’s cheap and uses it when it’s expensive. Energy arbitrage! That means that the mammoth version of Tesla’s PowerWall might be very attractive for industrial and commercial users. Even utilities might deploy them into neighborhoods. And if home users were more exposed to the “real” pricing in the commercial market, they too would be incentivized to get personal battery storage systems, with or without solar, for the same reasons. So far as I can tell, none of the available-in-Houston 325 plans from the 52 different retail electric providers offer hour-by-hour variable pricing like this, but in Austin or San Antonio, your traditional electric utility might be able to do it. Here’s a nice NPR article with useful details.

Conclusion 2: so long as consumers have net metering available and are not exposed to variable time-of-day electricity pricing, they won’t be incentivized to buy a battery storage system, with or without a solar system on the roof. There’s really no benefit for Houston consumers today to buy a storage system.

Teslarati runs a similar analysis in a state with variable pricing. In Southern California, the PowerWall becomes profitable in 3-5 years, and is unattractive for off-grid. Also, Vermont’s Green Mountain Power, not to be confused with our NRG-owned Green Mountain Energy, is ramping up some kind of joint program with Tesla. Who knows, maybe we’ll see something like it here some day.

One parting thought: in the insane, fragmented universe of the deregulated Texas electricity market, where generation, distribution, and retail sales are performed by unrelated players, we’ll probably be stuck with pricing policies that incentivize consumers to waste energy for make benefit most glorious State of Texas. Of course, exposing consumers to the raw industrial electricity market would likely be disastrous. Consumers can’t easily manage their load or trade contracts against future use. The best we seem to get are “smart” thermostats that can throttle back at peak times. Yawn. What seems missing, then, is better regulations for how consumer pricing is structured to incentivize lower peak usage. My proposed solution? Net metering and predictable time-variable pricing should be a standard part of any retail electricity offering. Let me sell high and buy low! Similarly, every plan should be structured to eliminate perverse rate structures where marginal rates go down as usage goes up. That’s common sense. Deregulation!

Dan Wallach is a professor of computer science at Rice and a friend of mine who has written four of these analyses before.

Tesla going nowhere

We have entered the period of the legislative calendar where bills that have not been voted out of committee or aren’t scheduled for a vote begin to get pronounced dead. Here’s the Tesla bill’s obituary.

A crusade waged by Tesla Motors CEO Elon Musk to change Texas law to allow his company to sell electric cars directly to customers is on life support at the Legislature.

After getting crushed by state auto dealers at the Capitol two years ago, Musk all but declared war in the name of Tesla, assembling a deep bench of powerful lobbyists and spreading out a total of $150,000 in political contributions to dozens of lawmakers in recent months.

However, bills backed by Musk and his money-losing electric-auto firm have not just stalled in the Senate and House – where unfriendly committees have suffocated the proposals – but appear to be heading in reverse as key legislative deadlines approach.

The latest blow: the senator authoring a bill to allow Tesla to sell directly in up to 12 locations across Texas said recently that he’s abandoned plans to push the measure forward.

“We’re not looking at pursuing the bill at this time,” state Sen. Kelly Hancock, R-North Richland Hills, said.

[…]

Hancock, the senator carrying the Tesla proposal, did not elaborate on why he was burying his proposal. But his sudden cold shoulder reflects the less than enthusiastic public response the bill received in the Senate, where it sits with no champion, no joint authors and no co-sponsors. Tesla never received a hearing, and won’t unless the House moves its version of the bill over, said Sen. Troy Fraser, who chairs the committee considering the legislation.

“Even the members in favor, which were not very many, do not want to have a hearing,” said Fraser, R-Horseshoe Bay, who polled the committee two weeks ago on whether to hold a Tesla hearing.

In the House, Tesla’s bill is actively being worked by an Austin Democrat, but also has been met with resistance. A panel of lawmakers gave the measure a lukewarm reception at a hearing last month in which a Tesla official said the company may have to resort to taking Texas to court to get what it wants.

The House Licensing and Administrative Procedures Committee left the bill pending, and the panel’s No. 2 says he doesn’t think it has enough support to move forward.

“It’s fair to say that Tesla is dead in committee for this session,” said state Rep. Roland Guitterez, a San Antonio Democrat who serves as the committee’s vice chair and opposes the bill. “If there was a willingness to move Tesla, I think we would have taken the vote already.”

See here, here, here, and here for the background. I’ve made the comparison to microbreweries often enough that even I’m tired of it, but keep two things in mind. One is that it took the craft brewers four sessions to get a bill passed; this is only the second session that Tesla has tried. And two, the brewers built a pretty good grassroots organization to bolster their cause. That’s easier for them to do since they have far more customers than Tesla does, but it worked where the spend-tons-of-money-on-lobbyists approach didn’t, or at least hasn’t so far. Draw your own conclusions. In the meantime, I’m sure Tesla will be back again in 2017.

Tesla makes its pitch

It’s a start.

At a packed committee hearing Monday evening, advocates for Tesla Motors told a panel of Texas House members that it was time to bring state car sales laws into the 21st century and allow the company to sell its luxury electric vehicles in Texas.

“The future is here,” said state Rep. Eddie Rodriguez, D-Austin, author of a bill that would allow Tesla to operate up to 12 stores in Texas. “The way in which we buy and sell goods is changing and we must adapt.”

The California-based company builds cars and sells them directly to consumers, bypassing car dealerships — a business model prohibited by Texas law. Tesla currently operates three “galleries” in Austin, Dallas and Houston, but employees there are barred from normal dealership activities like discussing prices or offering test-drives.

Rodriguez told the House Licensing and Administrative Procedures Committee that innovative technology companies like Tesla cannot succeed under the current system. His legislation, House Bill 1653, is similar to deals the company has struck in other states like New York, Ohio and Pennsylvania.

[…]

Opponents pushed back against Rodriguez’s bill on Monday, arguing that it creates two separate systems for car sales — one for Tesla and one for everyone else.

“Everyone should play by the same rules,” said Bill Hammond, CEO of the Texas Association of Business.

“It’s a solution looking for a problem. Tesla’s problems are self-imposed,” said Carroll Smith, who represents Texas on the National Automobile Dealers Association board in Washington, D.C.

See here for the background. I’ve said before that I support allowing Tesla into Texas, and that it wasn’t them that was asking for special treatment, but according to RG Ratcliffe, that’s not exactly true.

First, understand that this is not a fight over whether a car or truck can be sold over the Internet. That already happens through dealerships across the state. Go online, look at the dealer’s inventory and make a purchase.

Second, know this bill is not really about bringing free markets to Texas retail sales of new autos by busting the monopoly of licensed franchise dealers. House Bill 1653 would exempt manufacturers such as Tesla from having to sell through a state licensed franchise dealership, but the manufacturer would be limited to having a dozen or fewer sales locations in the state. Limiting the number of manufacturer dealerships just gives Tesla a competitive advantage over the giant motor companies of Detroit while trying to be unthreatening to the majority of Texas dealerships. Such a carve-out for Tesla is not exactly about bringing consumer choice to Texas, even if Tesla In Texas tries to claim otherwise.

[…]

Whether the Legislature carves out an exception for Tesal or not, this debate is no more about free markets than was the Candy Bin Bill that I once covered.

Once upon a time, bulk sales of beans and grains and candy were found just in health food stores for hippies, not the upscale groceries of today. Only two companies delivered food to the consumer in bulk. One used gravity shoots that dropped product directly into the consumer’s paper bag. The other used bins and scoops for the consumer to measure out how much product they wanted.

The gravity dealer pushed legislation that banned bins and scoops as health code violations. Imagine, their lobbyists said, a plumber coming from auguring out a toilet drain and sticking his unwashed hands into the bin to scoop up food. Ugh! Gross!

The bin dealer countered by claiming the gravity shoots should be outlawed because they were anti-consumer – get too much product and you have to buy it anyway because there is no way to return the excess to the bin. Let the consumer have freedom of choice!

In the end, a compromise piece of legislation passed giving the health department the power to regulate bulk food sales, no matter how it is delivered. Think of the auto dealers as the gravity shoot dealers and Tesla as the bin and scoop. They both want to be regulated, just to their own advantage.

Read the whole thing, it’s a great overview. I don’t get the licensed franchise dealership model, just as I don’t get the three-tier distribution system for beer. It’s great for those who get to participate in it, but it’s hardly a “free market” and it doesn’t do anything for the customers. I say we should let Tesla sell its cars the way it wants to, but that doesn’t mean they should be the only ones. If Ford or Toyota or whoever wants to set up their own shops to sell their cars directly to the public, I don’t see the problem with that. Last I checked, other manufacturers in other industries can do this (do the words “Apple Store” ring a bell?) and the republic remains on its feet. I understand why TADA wants to maintain the status quo, and I understand why Tesla is seeking this limited entrance, but that doesn’t mean it’s the way things ought to be.

Tesla tries again

They’ve brought more firepower to the fight this time, by which I mean “more lobbyists”, but we’ll see if they can break through.

Let the car haggling resume at the Texas Capitol.

A group of state lawmakers on Thursday filed legislation that would allow Tesla Motors to sell its luxury electric cars at as many as 12 stores in Texas, renewing the California-based company’s challenge to a state law protecting auto dealers.

Tesla’s business model is to sell directly to consumers, bypassing the middleman dealers as it does in many states. But a longstanding law bars that practice in Texas.

New legislation — House Bill 1653 and its companion, Senate Bill 639 — would allow manufacturers that have never sold their cars through independent dealerships in Texas to operate the limited number of stores. It’s modeled on deals Tesla has forged in other states, including New York, Ohio and Pennsylvania.

“Free market principles are the foundation of our strong Texas economy,” said state Sen. Kelly Hancock, R-North Richland Hills, who filed the Senate bill. “SB 639 helps sustain a competitive marketplace and gives consumers more choices.”

State Rep. Eddie Rodriguez, D-Austin filed the House bill, along with with Reps. Charles “Doc” Anderson, R-Waco; Jodie Laubenberg, R-Parker; Tan Parker, R-Flower Mound; and Ron Simmons, R-Carrollton.

Tesla currently showcases vehicles at “galleries” in Austin, Dallas and Houston, but because the galleries are not franchised dealerships, state law prohibits employees from discussing the price or any logistical aspect of acquiring the car.

Tesla calls the traditional dealership model unworkable, because it doesn’t mass-produce its cars — at least not yet. The company allows customers to order customized cars that it later delivers, and it can’t depend on independent dealers to champion its new technology, it says.

“Fundamentally, this company was founded to produce a new technology,” Diarmuid O’Connell, vice president of business development, said in an interview. “No one is as unconflicted as we are in our desire to promote electric vehicles.”

Some Texas dealers have approached Tesla about selling its cars, O’Connell said, and the company has “respectfully declined.”

Tesla and others have also questioned whether a traditional dealer could succeed in selling its cars, because dealerships make much of their money on maintenance — something the company’s highly touted models require little of.

O’Connell said the legislation would let Tesla employees educate Texans about its cars in person, allowing the company to grow its footprint here. He envisions adding stores in Corpus Christi, San Antonio, El Paso, Fort Worth and San Antonio, if given permission.

See here for previous Tesla blogging. The Trib also had an interesting story about the auto dealers’ attempt to get Tesla to work with them; some of that is recapitulated in the story above, but it’s worth reading on its own. Tesla insists that their model doesn’t work with dealerships, though I get a whiff of “the lady doth protest too much” in their argument. I’ve compared Tesla’s efforts to the microbreweries more than once, and one of the things that characterized that saga was that in the end they didn’t get everything they wanted. They scaled their wish list back to the point where they were able to minimize opposition from the big brewers and the distributors, and from there the task became doable. It would not surprise me if in the end Tesla needs to find some form of accommodation with the auto dealers.

Hyperloops

Look! Up in the sky! It’s a bird! It’s a plane! It’s a hyperloop!

Entrepreneur Elon Musk announced Thursday that he wants to build a “test track” for his idea for a futuristic high-speed transportation system called the Hyperloop, adding that Texas is “the leading candidate” to host the track.

Musk’s Hyperloop concept involves transporting passengers via pods in above-ground tubes that move as fast as 800 mph. The system quickly proved to be a polarizing concept when Musk introduced the idea in 2013, with some praising it as visionary and others deriding it as wildly impractical.

“In order to kind of help things along, we’re going to create a Hyperloop test track,” Musk told Texas Tribune CEO and Editor-in-Chief Evan Smith during an interview at the Texas Transportation Forum, an annual conference hosted by the Texas Department of Transportation. “Something that’s maybe on the order of a five-mile loop.”

Musk’s talk was part of a public relations blitz Thursday in Austin, as the Tesla Motors CEO hopes to persuade the Texas Legislature to allow Tesla to sell cars directly to Texans and circumvent the state’s requirements that cars be sold through dealerships. After his transportation forum interview, he spoke to a crowd of supporters gathered at the Texas Capitol.

During Thursday’s interview, Musk said the facility would be privately funded and not require the kind of incentives that his private space firm, SpaceX, received to develop a test facility in Texas.

“We’re not asking for any money from the state,” Musk said.

The idea for the test facility is apparently in the very early stages as Musk said that “it sounded good last night after a couple of drinks.” He explained that he envisioned the track as allowing for “teams of students” and companies interesting in developing the Hyperloop concept to test out different pod systems.

See this Ars Technica story, which links to and summarizes this overview document of hyperloops from Tesla. The basic idea was to build a better high-speed transportation system between San Francisco and LA, but the Houston/Dallas/San Antonio triangle would work for it as well. Assuming it’s feasible, of course, which Lord only knows. But hey, I wouldn’t mind a test track being built here. From skimming the doc, I suspect that anyone who is currently freaking out over the Texas Central High Speed Railway proposals would also freak out over this. We’re a long way off from that being a practical concern, and who knows, maybe the test track will prove it to be a bust. You have to admit, Elon Musk thinks big. Texas Politics, Dallas Transportation, Ars Technica, The Verge, and Swamplot have more.

Tesla brings the lobbyists

Nothin’ but good times ahead if you’re a Republican-connected lobbyist, thanks to Tesla and the auto dealers.

Locked in a brawl with auto dealers, Tesla Motors CEO Elon Musk is unleashing some of the most powerful lobbyists and consultants in the state to persuade lawmakers to make it easier for his company to sell electric cars in Texas.

Ahead of the legislative session, Musk has assembled an all-star team of politically well connected forces at the Capitol – almost all entrenched with top Republican leaders – to lay the groundwork for a full Tesla blitz come January.

Musk, the California billionaire who also heads the rocket company SpaceX, is pressing the Legislature to allow Tesla to bypass traditional dealerships and sell cars in Texas through its stores.

An attempt failed last session, as Tesla was squashed by a network of state auto dealers and their own team of well-connected hired guns.

This time, according to lawmakers and lobbyists, Musk has revved up the Tesla influence machine to make sure he doesn’t lose again in Texas.

“Tesla is going to move in force to bring significant resources to this debate this session,” said state Rep. Jason Villalba, a Dallas Republican who last session supported the electric-auto maker’s push. “You’re going to see a lot of pressure on these young new members in the Legislature, a lot of movement on the floor and the backrooms to get people convinced this a good deal for Texas.”

Playing the influence game at the Texas Capitol is nothing new for Musk, who employed a team of lobbyists last session and parachuted into Austin on two occasions to personally push for legislation to help SpaceX and Tesla.

He is set to hit Texas again next month – two days after the legislative session starts – to headline a state transportation forum.

But this time, he’ll be coming back to Texas just months after disappointing state officials with a decision to pass up on the Lone Star State for Tesla’s $5 billion lithium-ion battery plant in favor of Nevada.

And the company’s opponents know it.

“They tried to use the giga­factory as leverage to get their foot in the door, but the gigafactory was never coming to Texas,” said Bill Wolters, president of the Texas Automobile Dealers Association. “I can’t imagine what kind of tale they can spin.”

See here for the background. I’ve compared Tesla’s efforts to those of the microbreweries, but this is where the analogy breaks down, since they never had a phalanx of gold-plated lobbyists at their disposal. Anyone in the vicinity of the Capitol next spring ought to keep an eye out on the sidewalk as you walk around – you may see stray $100 bills lying around. We’ll see whose lobbyists are mightier. PDiddie has more.

Tesla is back

I wish them better luck this time, but I wouldn’t expect anything to come of it.

Proposals to allow direct car sales in Texas stalled during the 2013 legislative session, but the Pala Alto, California-based automaker appears poised to rev up efforts to revive the issue as lawmakers head back to work next month.

“We’re not asking to blow up the franchise dealer system,” said Diarmuid O’Connell, Tesla’s vice president for business development. “We are looking for a narrow and reasonable window to be able to promote this new technology ourselves.”

No one has pre-filed a bill promoting direct sales yet, and few in the Legislature have publicly supported the idea. But outgoing Gov. Rick Perry in March called the state’s laws “antiquated” and said it was time for “Texas to have an open conversation about this.”

Of course, Perry said that when Texas was still one of four states in the running to get Tesla’s new battery factory, which eventually went to Nevada. Perry prides himself on being able to woo job creators, and at the height of his Tesla charm offense during a June visit to California, he even drove the company’s Model S around Sacramento.

[…]

Texas Automobile Dealers Association lobbyist Robert Brazie said he believes bills promoting direct car sales will likely be filed before the end of the 2015 legislative session, but that he expects them to garner little support. He said an offer of future Tesla investments would carry little weight in the state, because “when they had a chance to come to Texas, they didn’t.”

Brazie added that Tesla explained its choosing Nevada by pointing to “geography, cost and speed of development,” reasons that had “nothing to do” with either state’s car sales laws.

O’Connell admits that getting the law changed won’t be easy.

“Does the fact that we didn’t site the factory there complicate things? Absolutely,” O’Connell said. “But we’re going to be doing a number of big battery factories in the coming years and we’re going to need new vehicle factories as well, and there’s a certain logic to doing those in Texas.”

See here for past blogging on Tesla. I agree with TADA lobbyist Brazie that one or more bills to allow Tesla to operate will be filed, and I agree that they will go basically nowhere. That’s about the extent of my agreement with TADA on this, as I think they are completely in the wrong. Be that as it may, I’ve previously compared Tesla’s efforts to those of microbreweries, and one implication of that is that I expect them to need several sessions to really get traction on this. Some kind of grassroots outreach would be a good idea for them, too. I’ll keep an eye on this going forward.

Another data point on Uber and Republicans

From Josh Barro.

Uber

Republicans have hailed Uber, the smartphone-based car service, as a symbol of entrepreneurial innovation that could be strangled by misplaced government regulation. In August, the Republican National Committee urged supporters to sign a petition in support of the company, warning that “government officials are trying to block Uber from providing services simply because it’s cutting into the taxi unions’ profits.”

But for Republicans, being the party of open and competitive markets is not always easy in practice. Just look at what happened two weeks ago, when UberX, one of Uber’s various ride-sharing options, began in Philadelphia. The local taxi regulator called UberX an illegal taxi service, so several drivers were fined and had their cars impounded.

Mayor Michael Nutter sent a clear message: Don’t blame me.

“I strongly support having Uber/Lyft services in Philly,” the mayor, a Democrat, wrote on Twitter on Oct. 27. “The #PPA, a STATE authority not run by the City, opposes them.” As Mr. Nutter correctly notes, Uber’s fight in Philadelphia is with the Philadelphia Parking Authority, a state agency that regulates taxis and whose board is appointed by the governor. Five of six parking authority board members are Republican appointees.

Anticompetitive business regulations are mostly imposed at the state and local level, and they usually have a strong built-in lobby: the owners of the businesses that are being shielded from competition.

The R.N.C. chairman, Reince Priebus, probably doesn’t get a lot of phone calls from taxi medallion owners, or car dealers, or other businesspeople who want to be insulated from competition.

But local politicians do; Republicans may be especially likely to hear from them because small business owners are a constituency that skews Republican.

As a result, in practice, it’s not clear Republicans are any more pro-market than Democrats when it comes to business regulation.

Andrew Moylan, a senior fellow at the R Street Institute think tank, has examined ride-sharing regulations around the country and doesn’t see a clear partisan divide. On Monday, R Street and Engine, a group advocating policies that support start-ups, [released] a report card rating the 50 largest cities on their friendliness to ride sharing. The eight cities receiving failing grades include ones in blue areas (Philadelphia and Portland, Ore.) and red ones (Omaha, Phoenix and San Antonio).

“There didn’t seem to be any obvious ideological trends,” Mr. Moylan said. “It may have something more to do with population density and consumer demand.”

In the case of Uber, the cities with the most to gain from innovation tend to be large and dense, and often Democratic. So at the local level, the leaders in welcoming Uber are often Democrats. Conservatives like to mock California as anti-business, but the state is one of just two to have enacted a comprehensive, statewide regulatory framework that is friendly to ride sharing. The other is Colorado, also run by Democrats.

But it’s not just about Uber and taxis. Consider state laws that prohibit auto manufacturers like Tesla from selling directly to consumers. Car dealers favor these laws, which interfere with Tesla’s direct sales model. Of 22 states that permit direct sales, 14 voted for President Obama. New York, California and Illinois all have freer markets in auto retailing than Texas. Did I mention that car dealers are a strongly Republican constituency? In 2009, the statistician Nate Silver found that 88 percent of car dealers’ political donations went to Republicans.

See here and here for previous musings on the subject of Uber and partisanship, and see here for the report. Note how California cities scored much better overall than Texas cities. R Street previously put out this press release that expressed their disappointment in Houston’s “onerous” regulations on ride sharing. We did score better than San Anotnio, for what that’s worth, and now you’ll be able to call Uber from the airports. As for Tesla, we all know about Tesla and Texas, right? Funny how that subject never came up during any of Rick Perry’s job-stealing trips. Anyway, I don’t have a lot to add to this, but as I’ve been tracking this sort of thing I thought it was worth mentioning.

No gigafactory for Texas

They’re going to Nevada.

Nevada Gov. Brian Sandoval announced Thursday that Tesla Motors will build a massive battery factory in the state as long as legislators approve tax breaks and other incentives worth up to $1.3 billion over 20 years.

Sandoval revealed terms of the deal he negotiated with the electric car maker at a Capitol news conference attended by Elon Musk, CEO of California-based Tesla. The governor called it a “monumental announcement that will change Nevada forever.”

Sandoval didn’t mention the total value of the package and his remarks seemed intended to pre-empt critics who will see it as too generous.

“Is this agreement good for us?” the governor asked. “This agreement meets the test, by far.”

Later, he said that for every $1 Nevada gives up, the project will produce $80 in economic impact.

“Even the most skeptical economist would conclude that this is a strong return (on investment) for us,” Sandoval said.

Musk told the audience that Nevada didn’t offer the biggest incentive package among the five states that tried to lure the factory, though he didn’t specify which did among California, Texas, Arizona, New Mexico and Nevada.

The most important considerations were not incentives, he said, but rather a high confidence that the factory will be ready by 2017, followed by assurances that batteries can be produced cost efficiently.

Later, Musk told reporters that Tesla would stop looking for another state as a backup, in case Nevada did not come through. “Nevada is it,” he said.

Well, I’m a bit skeptical of that 80-to-1 return claim, but I’m not an economist, so there you go. Texas was in the running for this, but there was a big obstacle in the way.

Despite the state’s advantages, the company had indicated that Texas’ long-standing state laws protecting auto dealerships – a challenge to Tesla’s business model – did not help the state’s case. Texas laws prevent car manufacturers from selling directly to Texas consumers, as Tesla does. Texas requires manufacturers to sell their cars through tightly regulated franchised dealers. A few other states restrict Tesla sales through franchise laws, but Nevada is not one of them.

I’ve blogged about that before. I wonder if this will have an effect on the effort to change that law in 2015. Because of this, Texas was thought to not be a serious contender for the gigafactory. I won’t claim to be a big fan of the money that was being thrown at Tesla by the competing states, but there’s no reason to keep that archaic setup for auto sales. The Rivard Report, the LA Times, and Think Progress have more.

It’s not Tesla that’s asking for special treatment

A couple of auto dealers take to the op-ed pages to argue that up is in fact down.

The motor vehicle franchise laws in place do not in any way hinder innovation; instead they foster the competition that benefits consumers.

One motor vehicle manufacturer, Tesla Motors, has been seeking an exemption from the franchise laws that require new motor vehicles sold in Texas be sold through a franchised dealer. Franchise laws exist to prevent monopolies and promote competition in vehicle pricing and service to the consumer, provide for the efficient distribution of vehicles and service across the wide geographic area that is our state, and provide a local presence where Texas consumers can have service, warranty and recall work performed even in cases when a manufacturer ceases to do business.

Nothing in state law is currently preventing the delivery of new Tesla vehicles from California to the citizens of the state of Texas who wish to purchase them online. Nothing in state law prevents Tesla from using the exact same model it is using today, with gallery stores and service facilities at other locations, so long as any retail presence is operated through a franchised dealer of Tesla’s choosing.

As business owners, we can tell you first-hand that franchised motor vehicle dealers in Texas are more than eager to help Tesla succeed. In fact, numerous Texas dealers have contacted Tesla seeking an opportunity to retail their vehicles subject to Tesla’s desires. Not only will the franchised dealer absorb any capital outlays required for the Tesla model, but we also believe the franchised dealer can help Tesla sell many more vehicles over the long term.

Increased sales volume without the cost burden is a winning business model, which is why every other major auto manufacturer who sells in Texas participates in the model (not to mention those who already sell electric vehicles).

So why the request for special treatment just for Tesla?

Considering the value of the consumer-protection based system currently in place and the fact that Tesla Motors now has the opportunity to sell its cars to Texans, we do not see any compelling rationale to provide special treatment for Tesla. Other manufacturers produce electric vehicles.

See here and here for the background. Sorry, but it’s the dealers that are asking for special treatment by forcing Tesla to include them in their business model. Plenty of manufacturers are allowed to sell directly to customers. I get the dangers of vertical integration, but the existence of Apple stores doesn’t seem to have hindered innovation in the smartphone market. How would letting Tesla sell directly to customers affect innovation in the automobile market? Frankly, if anything I’d expect it to spur innovation, as it might force a reconsideration in how cars are marketed, sold, and maintained. I’m sorry, but someone who doesn’t benefit from the current setup is going to have to explain to me why it shouldn’t be changed for me to accept the plausibility of that argument.

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.

Tesla and Texas

Tesla Motors currently can’t sell its cars in Texas via its preferred model of direct sales to consumers. Its attempts to modify state laws to allow for direct sales went nowhere last session, blocked by fierce opposition from the Texas Automobile Dealers Association. They’re now looking for a place to build their new batteries. Why would they choose to do that in Texas given all that?

Now, those restrictions, which rank among the country’s strictest, could harm Texas’ chances of landing the $5 billion lithium-ion battery plant Tesla plans to construct by 2017.

In late February, the company announced that Texas was one of four states — along with Arizona, Nevada and New Mexico — in the running to house the wind- and solar-powered “gigafactory,” which Tesla says would span as many as 1,000 acres and employ about 6,500 people.

[…]

Tesla officials, however, have indicated that Texas’ tough restrictions on the company’s sales do not help the state’s case.

Alexis Georgeson, a company spokeswoman, said she could not specifically address how Tesla would weigh various factors in its selection process, but she said comments from Diarmuid O’Connell, Tesla’s vice president of business development, properly sum up Tesla’s view of Texas’ restrictions.

“The issue of where we do business is in some ways inextricably linked to where we sell our cars,” O’Connell told Bloomberg this month. “If Texas wants to reconsider its position on Tesla selling directly in Texas, it certainly couldn’t hurt.”

Texas laws prevent car manufacturers from selling directly to Texas consumers, and they require manufacturers to sell their cars through tightly regulated franchised dealers.

[…]

Tesla currently showcases vehicles at “galleries” in Austin and Houston, but state law prohibits employees from discussing the price or any logistical aspect of acquiring the car. That means prospective buyers in Texas must order the car from Tesla’s headquarters in Palo Alto, Calif. The cars are then delivered in a truck with no company markings, per Texas law, and customers even have to unwrap their new automobiles themselves, because the law prohibits Tesla’s in-state representatives from doing, saying or touching anything related to selling or delivering cars.

“It’s incredibly inconvenient,” Georgeson said. “Really what they are doing is making it tougher for customers.”

See here, here, and here for the background. I drew an analogy to microbreweries and their multi-session fight to get antiquated beer distribution laws changed. I still think that’s an apt comparison, but if it takes Tesla as long as it took the microbrewers to achieve their goal, it’ll be well past the time Tesla intends to have that factory up and running before they succeed. My guess is that they’d like some assurance of a quicker resolution before they’d be willing to commit to building here. To his credit, Rick Perry supported HB3351, the bill that would have done the overhaul Tesla wanted. Wendy Davis did not say she would support such a bill in 2015 – I seriously doubt she’d veto it if it passed on her watch – though she supported the general idea. Greg Abbott typically had nothing to say. So we’ll want to keep an eye on what individual legislators and candidates are saying. My guess is that Tesla is in for a fight that will take more than one more session to resolve. Whether that affects their decision about where to put that battery gigafactory remains to be seen.

Tesla will be back

This story was from earlier in June.

Texas’ state legislature failed to vote on a bill backed by Musk’s Tesla Motors (TSLA) that would have loosened the state’s restriction on dealerships owned by automakers. The legislature concluded its most recent session last week, and won’t be back until January 2015.

Tesla has tangled with dealership associations in a number of states in its effort to sell its Model S electric sedan directly to consumers rather than using franchised car dealers. Musk testified before lawmakers in Texas on the issue earlier this year.

[…]

Speaking at Tesla’s annual shareholder meeting Tuesday, Musk cited polling data from various states to argue that consumers overwhelmingly favor allowing direct sales.

“Clearly, if democracy was working properly and the legislators were implementing the will of the people, something else would be happening, and there would not be legislation trying to artificially restrict direct sales,” Musk said.

“Right now, the autodealers’ association — they’re crowing about the fact that they were able to defeat us in Texas and that they’re making so much progress in North Carolina and stopping us in Virginia,” he added. “I think it’s outrageous.”

See here and here for some background, and this earlier story for more. I’ve compared what Tesla is trying to do to what the craft brewers finally managed to do, and if Elon Musk is as smart as he seems to be, he’ll figure out a way to mimic their tactics. In both cases, the argument in favor of loosening the archaic restrictions is basically self-evident, it’s mostly a matter of getting the public on your side, and educating the legislators, all of whom would favor the changes if they truly understood the concept of a “free market”. It’s a process and not a straight line, and you shouldn’t expect to win without a fight, but I do believe it’s inevitable. It may take awhile, but in the end I believe Tesla will prevail.

Auto dealers versus Tesla

I’m pretty sure the dealers will win this round, but I doubt they can win in the long run.

Texas auto dealers and their lobbyists in Austin are targeting legislation that would allow Tesla Motor Inc. to sell its all-electric vehicles directly to customers — upending a longstanding protection of dealers in state law.

After quickly compromising on or abandoning interest in other bills, dealers have dug in their heels after a Texas House committee this week advanced a bill that would permit the Silicon Valley-based company to circumvent a mandate that automakers sell new cars and trucks only through franchised dealers.

“They’re looking to take the franchised dealer out of the loop,” said April Ancira, vice president of operators for the Ancira Auto Group.

“What this does is it takes a lot of competitive pricing away,” she added. “You would only have the manufacturer, and there would be no dealers to compete, which is always better for the consumer in the end.”

[…]

Lobbyists with the Texas Automobile Dealers Associations concede that Tesla, which sells all-electric sedans, is a small niche player. But dealers fear even the narrowest of legislation could open the door to other manufacturers that would like to cut out the middleman.

“It’s an easy gateway for the manufacturers to start piling in,” Ancira said. “All of the sudden, you see the franchised dealer model disappearing, and that could spread into other arenas outside of the automotive industry.”

[…]

Citing an Austin Business Journal survey that found 86 percent of respondents support allowing Tesla to bypass dealerships, the company said the ability to sell directly to customers “is the best chance that a new electric car company has of succeeding.”

“For (TADA) to claim that restricting competition is in the best interests of the public is wrong and defies obvious common sense,” [Tesla CEO Elon] Musk said in a statement.

He has visited the Capitol several times recently, hoping to foster support for the legislation among state lawmakers.

Sen. Leticia Van de Putte, D-San Antonio, said she has met with Musk and said he was persuasive. Still, “I’m really uncomfortable at this point,” she said. “I’m not convinced.”

I’ve compared Tesla to microbreweries, and it’s in the response from the dealers that the parallel becomes apparent. Tesla’s a small new player in a niche market that has a different business model that doesn’t fit with what the big established players do. More to the point, existing decades-old laws preserve the status quo and make it impossible for the new player to operate the way it wants to. The new guys go to the Legislature to get a bill passed that would carve an exception into the laws for their business, and the established guys go ballistic. My favorite part is where the established guys claim that by restricting the ways that consumers can buy the products they all make, they’re protecting the interests of the consumer. In the meantime, legislators who aren’t terribly familiar with the new business model but who hear a lot from the established guys about how dangerous this newfangled stuff is, are hesitant to take action. As they say, it’s deja vu all over again.

But here’s the thing. The new guys have tapped into something that a small but growing number of people want, and those people are passionate about it. They don’t accept that what they want is dangerous, and they have no desire to be “protected” from what they want. Over time, the new business model becomes more familiar, and more legislators come to understand and support it. It takes a few sessions, and a lot of grassroots organization, but eventually enough pressure builds up to force a way in for the newbies.

Obviously, I’m projecting for Tesla. I’ve not heard of a movement to replicate what the fans of craft beer have done as yet. But I think Tesla is smart enough to recognize that this is the best way forward for them, and like the microbreweries they benefit from the fact that the existing setup is archaic and stifling and makes no sense. It’s hard to defend the indefensible, and sooner or later something has to give. I don’t know how this will play out, but my money is on Tesla, or whoever succeeds them in the marketplace, eventually winning out. It’s just a matter of how long it takes.

Legislative quick hits

This is the time of the session where there’s lots happening, and there isn’t always the time or space to stay on top of it all. So here are a few quick updates on things that are happening in an attempt to at least not be too far behind.

A bill to give Tesla Motors an opportunity to operate in Texas moves out of committee in the House.

The House Business and Industry Committee advanced a bill on Tuesday that would allow Tesla Motors to circumvent the state’s franchise dealer system and sell cars directly to Texans, giving a shot in the arm to the company’s efforts to operate in the state.

Tesla says an exemption from the franchise dealer system is the only way the company can operate successfully in Texas, but the owners of state auto dealer franchises have objected, saying the effort weakens a business model that has been key to their success.

House Bill 3351, by state Rep. Eddie Rodriguez, D-Austin, was replaced by a committee substitute that offered auto dealers another layer of protection: If Tesla ever sells more than 5,000 cars a year in the state, it will become subject to existing regulation and must start to franchise its operations.

With Tesla projecting sales of only a few hundred cars a year in the state, the bill’s supporters, including Diarmuid O’Connell, the vice president of business development for Tesla motors, called this a workable approach.

“This would give us the space we need to introduce our technology in the state,” he said.

See here for the background. I’m rooting for this one.

A bill to allow online voter registration has passed the Senate.

[Tuesday] afternoon, the Texas senate approved SB 315, a bill proposed by State Sen. Carlos Uresti (D-San Antonio) to allow holders of unexpired Texas driver’s licenses or state-issued IDs to register to vote online.

Currently, registered voters in Texas may change their addresses online if they move within the same county but must complete a paper application if they are registering to vote for the first time or have moved to a different county.

In testimony on the proposed bill, election administrators said the legislation would both save significant money by reducing the need to manually enter information and eliminate transcription mistakes that happen with the current process.

The version of the bill approved by the Texas senate differs slightly from the original filed version in that the passed bill no longer requires voters to use the address listed on their license or ID as their voter registration address.

A similar bill – HB 313 – by State Rep. Mark Strama (D-Austin) is currently pending in the state house.

See here for the background. Another bill I’m rooting for. BOR has more.

Sen. Dan Patrick’s charter school expansion bill had its hearing in the House

Lawmakers didn’t let on too much of their feelings about the bill—but Killeen Republican Jimmy Don Aycock, chair of the House Public Education Committee, said he didn’t consider the bill watered-down, because it allows the state’s charter network to grow. Charter school officials seemed to agree.

The bill still gives charter schools priority access to unused public school facilities, which Kathleen Zimmerman, executive director of NYOS Charter School, said is the bill’s most important improvement. Zimmerman said she has to give up her office for tutoring sessions because unlike public schools, charters don’t get facilities funding.

Under the Senate version, the education commissioner would revoke charters of schools that performed poorly in three out of five years.

Zimmerman said she didn’t focus on those higher standards because she wanted to highlight the positives. But, she said, “as a charter operator, I don’t want poor performing charters either.”

Rep. Alma Allen (D-Houston) said she’s concerned that charters may have a hard time getting loans because some banks want them to plan to be open for more than five years.

Charles Pulliam, chief development officer of Life School charter in Dallas, said that prospect would undermine the flexibility charters need to test out innovative education strategies.

“It scares me a little,” Pulliam said. “To have one blanket way of determining if they are successful is a mistake.”

The bill is SB 2, and it easily passed the Senate after adding a bunch of mostly Democratic amendments. It is pending in the House Public Ed committee.

Speaking of charter schools, a bill to limit the role ex-SBOE members can play at one has advanced.

A measure to bar former State Board of Education members from taking a job at a charter school or related foundation within two years of serving on the board is headed to the full Senate.

Senate Bill 1725 by state Sen. Bob Deuell, R-Greenville, is intended to close the revolving door between the SBOE and charter schools.

An amendment by Sen. Leticia Van De Putte, D-San Antonio, would allow former board members to take a job at a charter school within the two-year period so long as that member did not vote to create that particular school.

The Senate Education Committee passed the bill 6-3 late Tuesday.

The three nays all came from Republicans, which suggests this bill could have problems getting any farther.

The Lege has been trying to change the name of the Railroad Commission to something more reflective of reality for as long as I can remember. They’re still trying, and working on some other reforms as well.

The bill, SB 212 by State Sen. Robert Nichols, R-Jacksonville, embodies a previous Sunset review of the Railroad Commission that didn’t pass in the last legislative session that would forbid certain campaign contributions. For instance, commissioners could not accept donations from a party involved in a contested case hearing. It would also limit campaign contributions to the 17 months before an election and 30 days after. Commissioners are elected to six-year terms.

A contested case hearing is the way citizens protest against an oil and gas company permit or action.

Barry Smitherman, Chairman of the Railroad Commission, said during testimony that the campaign restrictions were “tricky” because the commissioner position is elected statewide, the state is big, travel is necessary and commissioners must raise money.

State Sen. Rodney Ellis, D-Houston, who sits on the committee, said the Sunset Commission had thought hard about how to put reasonable limits on the campaign financing.

“Sitting there for a six-year term, being able to raise unlimited amounts of money from the industry that they regulate, there clearly is a perception problem,” said Ellis.

The Railroad Commission should be subject to restrictions that differ from other statewide elected officials, like senators and representatives, because the nature of the commission is unique, Nichols said, because the commissioners have six-year terms, they regulate a specific industry and they set rates.

Similar Sunset legislation for the commission originating in the House, HB 2166 by State Rep. Dennis Bonnen, R-Angleton, recently passed out of committee, but largely stripped of the campaign and ethics reform, according to Texas Energy Report. That bill could end up competing with the Senate bill discussed Tuesday.

[…]

No one testified specifically against the name-change provision. [Commissioner Christi] Craddick suggested the more succinct Texas Energy Commission. State Sen. Glen Hegar, R-Katy, who worked on the Sunset review that failed to pass in the last legislative session, also suggested a new name.

“I’d like to change it to Texas Department on Oil and Gas because it sounds cool … TDOG,” Hegar said.

The official name in the bill is Texas Energy Resources Commission. But I like Sen. Hegar’s suggestion.

We close with two from the inbox. First, from Equality Texas:

Moments ago, the House Committee on Criminal Jurisprudence advanced House Bill 2403 by Rep. Mary González of El Paso on a committee vote of 5-3.

HB 2403 would remove existing inequity in Texas’ “Romeo & Juliet” Affirmative Defense law. The “Romeo & Juliet” Affirmative Defense is a logical approach to the reality that adolescents sometimes make sexual decisions that adults wish they had not made, but that adolescents have been making since the beginning of time.

Under current law, if teen sweethearts are of opposite sexes, consensual intimate contact remains a matter between parents and their children. However, the “Romeo & Juliet” Affirmative Defense is not currently available to dating teens of the same gender. The state should not intrude on the right of parents to instill their values about sex into their children. Nor should the state interfere if teenage sweethearts make decisions that their parents believe are not what is best for them.

This needs to be a conversation between parents and their children. Not between parents, their children, an arresting officer, a prosecuting attorney, and a trial judge. That is why the “Romeo & Juliet” Affirmative Defense exists.

HB 2301 will ensure that it applies equally to straight & gay teens.

Today’s House committee action follows advancement of identical legislation by the Senate Committee on Criminal Justice. On April 9th, Senate Bill 1316 by Senator John Whitmire of Houston was advanced by the committee on a 4-1 vote. SB 1316 is on the Senate Intent Calendar for Tuesday, April 23, 2013.

See here for more. As far as I can tell, the full Senate has not taken up SB1316 as yet.

Last but not least, a non-good bill from Empower the Vote Texas:

HB 148 by Rep. Burkett is scheduled to be voted on by the full House tomorrow, April 25th. Please contact your State Representative and tell them to vote NO on this bill. If you are not sure who is your State Rep, you can use the “Who Represents Me” lookup tool. Emails addresses for all House members are firstname.lastname @ house.state.tx.us, however phone calls are much more effective.

Attached are the letter ETVT sent to all Representatives opposing this bill along with supporting documents. The original text of the bill as introduced, the new text of the committee substitute, witness list, and bill analysis can be found here.

A copy of the letter is here. The hearing is today, so we’ll see how it goes.

What does Tesla Motors have in common with microbreweries?

Both are forbidden by archaic laws from selling their wares direct to the public.

Electric car maker Elon Musk wants to bet big on Texas – but he’s having trouble getting his chips on the table.

Musk, a South African-born entrepreneur and the CEO, chairman and co-founder of Tesla Motors, wants to sell Tesla’s electric cars directly to Texas consumers. But to do so, the company must win an exemption from state antitrust laws that regulate the relationship between car dealers and manufacturers.

State laws prevent car manufacturers from selling directly to Texas consumers and require that manufacturers operate through a tightly regulated franchise system. Texas’ protections for car dealers are among the strongest in the country. The Texas Automobile Dealers Association says the rules protect consumers, and ensure the livelihood of Texas auto dealerships. Tesla and its supporters say the laws are an antiquated legacy, and that the ability to sell directly to customers is crucial to the company’s livelihood.

“Everyone told us when we were getting into this that we’d get our ass kicked,” Musk told reporters at a press conference on Wednesday. “Well, I guess there’s a good chance that we will get our ass kicked. But we’ll try.”

Two bills — Senate Bill 1659, by state Sen. Craig Estes, R-Wichita Falls, and House Bill 3351, by state Rep. Eddie Rodriguez, D-Austin — would carve out narrowly tailored exemptions from state franchise law for Tesla. Under the measures, American manufacturers of electric cars that have never previously had franchised dealerships could sell cars directly to customers.

But the bills’ critics, including some legislators, ask why Tesla can’t conduct business like other, established car companies.

“There’s nothing prohibiting this company, in the future, from finding a dealership to represent them,” said state Sen. Dan Patrick, R-Houston. He argued that weakening the dealer model would hurt car owners.

“I would be wary, as a consumer, of buying a car from a manufacturer that may or may not be here in six months.”

I’m just curious – has anyone ever explained to Dan Patrick how capitalism works? What he said is true of any product or service on the market. Last I checked, auto dealerships can go belly-up, too.

Currently, Tesla has “galleries” in Austin and Houston. Employees there are legally prohibited from discussing the price or any logistical aspect of acquiring the car. Consumers who want to purchase the vehicle have to order the car from Tesla’s headquarters in Palo Alto.

The cars are then delivered in a truck with no company markings, per Texas law. Once delivered, Musk said, the customers even have to unwrap their new automobiles themselves, because under the law no representatives of Tesla’s in the state are allowed to do, say or touch anything related to selling or delivering cars.

To put it bluntly, this is nuts. Laws like these, in the automotive industry and the beer-making industry, do nothing for consumers, but do ensure a tidy piece of the action for a privileged set of middlemen. I can’t imagine too many people will want to buy a car direct from a manufacturer – most of us have at best a vague idea of what we want in a car, which is why we go to dealerships and take test drives and so on – but I can’t think of any reason why someone who does know what she wants should be prevented from doing business directly with the source. If Dan Patrick or anyone else is truly concerned about the risk such customers may be exposing themselves to, they can insist on including some strong consumer protections in the law that Tesla is seeking. Ideally, the exception Tesla is seeking to carve out really ought to be a general one for all automakers, but the bills are narrowly tailored to just them because everyone is already freaking out about it. The Lege can be a very weird place sometimes. As with the microbrewers, it will take Tesla more than one session to get enough buy-in on this to get a bill passed. I hope they’re in business long enough to see it happen, if only so Dan Patrick doesn’t get to say “I told you so”. See also this Trib interview with Elon Musk, and Texas Politics has more.