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Tesla's "Gigafactory" has Governors Googly-eyed But Can Rick Perry Pull off A Texas Miracle?


by: Joe Deshotel

Tue Jun 17, 2014 at 10:01 AM CDT


I don't always agree with Rick Perry, but when I do, it's because he wants Telsa to come to Texas. With as much recruiting time as Perry spends in California, one would have imagined the Governor would have invited Tesla's Elon Musk to do business in Texas along time ago.

Well, in short he did, just not for Tesla. Musk's other out-of-this-world project SpaceX has had a good working relationship with the Texas legislature, has been creating jobs, and is preparing to launch rockets in South Texas.

It is hard to believe with the pro-business rhetoric of Texas politicians that the state would be anything but welcoming to the innovative car company. But while SpaceX is literally embarking on a whole new frontier, Tesla is infringing on an old establishment model of auto dealerships.

Read below the jump about the dueling Governors of America's largest states, as they do battle for Tesla's ultimate prize -- the "gigafactory"...

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Currently Tesla can not sale its vehicles directly to consumers in the state. There a a few showrooms where employees can let interested parties view the vehicles but there can be no talk of purchase -- in fact one can not even be pointed to the website for information on placing an order. Even after purchasing the car must be shipped from California by a 3rd party on a nondescript transport vehicle. Does that sound like sensible regulation, or industry protectionism?

The Texas Automobile Dealers Association (TADA) has given nearly $2 million to politicians between 2004 and 2012. About 70% has gone to Republicans and 92% has gone to incumbents. With only about 3% going to challengers, change is not something ready to be rolled off the lot just yet.

Between 2010 and 2012 Rick Perry received $60,000 in contributions from the TADA, but in the 2012 cycle while Tesla was vigorously fighting antiquated laws banning the direct sale of their vehicles, Perry took in a total of over $250,000 from car dealers according to Texans for Public Justice.

Why the change of heart? It could be that Perry is wooing the company as a Swan Song to his, largely viewed as, pro-business tenure as Texas Governor before making another go at the White House. Or it could be the dangling carrot of 6,500 jobs and over $4 billion worth of investment in a potential lithium-ion battery manufacturing "gigafactory" that could come as part of the deal.

Now California is showing Texas some of the upsides of a full time legislature, a new Senate Bill would expedite the building of a facility in the state should it be chosen as a final site. Tesla has expressed that it may choose multiple sites to ensure the overall project it isn't delayed extensively. The additional sites may serve as backups but Musk has stated that he believes the company could eventually need "hundreds of gigafactories."

This particular sales pitch will be extra difficult for Perry since it flips the traditional script casting Texas as the over-regulating authority vs. an entrepreneur and innovation friendly California.

You can follow me on Twitter at @joethepleb.



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