Additionally, it appears that this barrier isn\u2019t going away anytime soon. Lawmakers made the determination \u201cnot to pass legislation that would allow automakers to sell directly to Texans.\u201d[6]<\/a> The opportunity to change these laws does not seem to be available again until 2023 when lawmakers meet again, but as for now these franchise laws remain the same.[7]<\/a> This delay is largely due to Texas\u2019 legislature meeting every other year for 140 days.[8]<\/a><\/p>\n This is not the first time; however, Tesla has encountered this problem.[9]<\/a> In 2014, Tesla faced a lawsuit in Massachusetts when two dealers and the Massachusetts State Automobile Association attempted to block the company \u201cfrom selling luxury electric cars directly to consumers in the state, enabling it to bypass traditional dealerships.\u201d[10]<\/a> There Tesla Motors MA, a \u201cwholly owned subsidiary,\u201d was essentially conducting a display inside of a mall where individuals could learn about Tesla\u2019s vehicles and actually view them.[11]<\/a> The court additionally clarified that \u201c[n]either of the defendants is affiliated in any way with the plaintiffs.\u201d[12]<\/a><\/p>\n The court ultimately found that the plaintiffs lacked standing on the issue and held that \u201c[t]he law \u2018was intended and understood only to prohibit manufacturer-owned dealerships when, unlike Tesla, the manufacturer already had an affiliated dealer or dealers in Massachusetts.\u2019\u201d[13]<\/a> There the plaintiffs were unaffiliated and therefore not within the coverage of the law.[14]<\/a> Here Tesla earned a favorable result.<\/p>\n Now as Tesla builds its new factory in Texas, however, residents may be inconvenienced by their purchasing options.[15]<\/a> They may need to purchase Tesla\u2019s vehicles in a different state, or have it processed in a different state.[16]<\/a> If paperwork is processed in a different state \u201c[t]he car is then shipped to one of Tesla\u2019s service centers in the state, where the buyer can pick it up.\u201d[17]<\/a> Tesla facilities in Texas also cannot process or place online orders made by Texans.[18]<\/a> \u201cOne buyer noted his paperwork had been FedExed to and from a Tesla Store in Nevada for completion.\u201d[19]<\/a> These restrictions will ultimately place residents in a difficult position.<\/p>\n Texas law also impact companies such as General Motors and Toyota.[20]<\/a> Tesla experiences these difficulties in other states as well such as New Mexico, South Carolina, and Connecticut.[21]<\/a> There are also several states that \u201crestrict the number of dealerships that Tesla can have in the area.\u201d[22]<\/a><\/p>\n Ultimately, Tesla\u2019s decision to move to Texas appears to be beneficial for the state as the company plans to hire approximately 5,000 workers.[23]<\/a> However, it appears the company will be waiting on a decision from Texas lawmakers as to whether these limitations will change.<\/p>\n <\/p>\n [1]<\/a> Niraj Chokshi, Tesla Will Move its Headquarters to Austin, Texas, in Blow to California<\/em>, N.Y. Times (Oct. 13, 2021), https:\/\/www.nytimes.com\/2021\/10\/07\/business\/tesla-texas-headquarters.html.<\/p>\n [2]<\/a> Kate Duffy, Tesla has to Ship Texas-Made Cars to Other States Before it Can Sell Them to Texans Because of State Laws<\/em>, Bus. Insider (June 1, 2021, 8:06 AM), https:\/\/www.businessinsider.com\/tesla-texas-cars-ship-out-of-state-sell-texans-2021-6.<\/p>\n [3]<\/a> Jack Dutton, Tesla Moves Headquarters to Texas, Where it\u2019s Allowed to Sell Cars<\/em>, Newsweek (Oct. 8, 2021, 5:11 AM), https:\/\/www.newsweek.com\/tesla-moves-headquarters-texas-where-its-not-allowed-sell-cars-1636881.<\/p>\n [4]<\/a> Id.<\/em><\/p>\n [5]<\/a> Id.<\/em><\/p>\n [6]<\/a> Id.<\/em><\/p>\n [7]<\/a> Id.<\/em><\/p>\n [8]<\/a> Id.<\/em><\/p>\n [9]<\/a> See <\/em>Jonathan Stempel, Tesla Prevails in Top Massachusetts Court Over Direct Sales<\/em>, Reuters (Sept. 15, 2014, 5:22 PM), https:\/\/www.reuters.com\/article\/us-tesla-motors-massachusetts-lawsuit\/tesla-prevails-in-top-massachusetts-court-over-direct-sales-idUSKBN0HA29620140915.<\/p>\n [10]<\/a> Id.<\/em><\/p>\n [11]<\/a> Massachusetts State Auto. Ass\u2019n, Inc. v. Tesla Motors MA, Inc.<\/em>, 15 N.E.3d 675, 677 (Mass. 2014).<\/p>\n [12]<\/a> Id.<\/em><\/p>\n [13]<\/a> Stempel, supra<\/em> note 9 (quoting Tesla Motors MA, Inc.<\/em>, 15 N.E.3d at 688).<\/p>\n [14]<\/a> See<\/em> id.<\/em><\/p>\n [15]<\/a> Duffy, supra<\/em> note 2.<\/p>\n [16]<\/a> Id.<\/em><\/p>\n [17]<\/a> Id.<\/em><\/p>\n [18]<\/a> See<\/em> John Voelcker, Tesla Will Have to Ship its Texas-Built Cars Out of State to Sell Back to Residents<\/em>, The Drive (May 27, 2021), https:\/\/www.thedrive.com\/tech\/40779\/tesla-will-have-to-ship-its-texas-built-cars-out-of-state-to-sell-back-to-residents.<\/p>\n [19]<\/a> Id. <\/em><\/p>\n [20]<\/a> Id. <\/em><\/p>\n [21]<\/a> Duffy, supra<\/em> note 2.<\/p>\n
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