Tesla Model S

Tesla Motors is a company on the move these days. After testifying in front of Texas’ Assembly this week to lift the state’s laws on company-owned franchises, CEO Elon Musk said there’s a distinct possibility that the electric car maker could open its next plant in the Lonestar State.

“When we do establish a manufacturing plant outside of California, Texas would be a leading candidate for that,” Musk said in an interview with Automotive News.

tesla roadster 300x187 imageCalifornia has been home of Tesla since it started building re-engineered the Lotus Elise sportscar as the Tesla Roadster back in the mid-2000s. The company was awarded with the former NUMMI General Motors-Toyota joint manufacturing facility in 2009 after GM’s bankruptcy forced the automakers to give up the plant in Fremont, California. Now it’s producing the 2013 Tesla Model S sports sedan at a rate of more than 400 cars per week and hopes to have the Model S reach 20,000 cars annually. In addition, Fremont is likely to be home to the 2015 Tesla Model X crossover, which the company has said it wants to build at a rate of 15,000 a year.

The unfortunate fact is that Fremont, which is outside of San Francisco, is an ungodly expensive place to have a car manufacturing facility. Much of California’s manufacturing business has migrated to other states that still have plenty of cheap land and tax policies that make it more conducive to operate. Texas is a pretty good place to start, which Musk said would work within its timeline of searching out a new place for a plant in about three years. Around that time, it is expected that Tesla will unveil a smaller, BMW 3 Series-fighting electric car.

Musk was in town to testify that the Texas Dealers’ Association’s policies make it nearly impossible for Tesla to sell cars in the state. Under state law, Teslas two service centers can’t offer pricing information, schedule test drives, or even perform maintenance on cars because they’re company-owned. Electric cars have fewer moving parts, and most dealerships don’t make money with sales; they make them with servicing. Musk contended that the traditional sales model is designed to disallow Tesla’s success in Texas by swaying consumers away from electric cars. They need to have their own boutique dealers, he says.

Musk said that if an exemption to the state’s laws could be found, it could be a huge market for Tesla to the tune of 1,500 to 2,000 cars per year, similar to what he anticipates Tesla will sell in California. And in truck-hungry Texas, Musk might have just the product that could sell.

“I have this idea for a really advanced electric truck that has the performance of a sports car but actually more towing power and more carrying capacity than a gasoline or diesel truck of comparable size,” Musk said. “That could be really cool, and I think that would probably make sense to do that at a new plant.”

We’ll just have to see sometime in the hopefully not-too-distant future if he can pull it off. We wouldn’t bet against him; he did build a commercial spacecraft after all.

Source: Automotive News (Subscription required)

By Jacob Brown