Automobile

Might Tesla sell electricity in Texas before it can sell cars there?

It’s still unclear if Tesla will be able to sell cars directly to customers in Texas when a local factory opens, but the company is now looking to become an electricity supplier in the Lone Star State.

The automaker filed an application with the Public Utilities Commission of Texas August 16 to become a “retail electric provider” (REP), through a subsidiary called Tesla Energy Ventures, Texas Monthly reported Thursday.

On the deregulated Texas energy market, REPs purchase electricity from producers and sell it to customers. Tesla Energy Ventures told regulators that it would use the company’s existing channels, including its mobile app and website, to attract customers, according to TechCrunch.

This adds a new twist to the complicated relationship between Tesla CEO Elon Musk and the state of Texas.

Tesla is building a new factory near the state capital of Austin, and it’s likely to ramp up very soon, possibly this fall. During a financial call last year, Musk said the Texas factory would assemble the Cybertruck, Semi, Model 3, and Model Y for the Eastern half of North America, while the Fremont, California, will continue assembling the Model and Model X for all markets, plus Model 3 and Model Y vehicles for the Western half of North America, and the promised Roadster sports car.

However, Tesla may not be able to sell the cars it makes in Texas to residents of the state until 2023, at the earliest.

Tesla Cybertruck prototype – Nov. 2019

Current franchise laws prohibit the direct-sales model used by Tesla. The company has lobbied unsuccessfully over the years to have the laws changed. Following the announcement of the Austin factory, a bill was introduced in the Texas legislature to allow direct sales, but it stalled. Because the Texas legislature only every two years, Tesla now has to wait until 2023.

Tesla may not be the only EV firm targeting Texas. Rivian is also reportedly eyeing a site in the Fort Worth area for its second factory. It’s worth noting that Rivian’s current Illinois factory hasn’t built any (non-Amazon) customer vehicles yet, and the company also plans to use direct sales instead of franchised dealerships.


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