Could Tesla Trade a Factory for Showroom Rights in Texas?

Mar 04, 2014 12:09 PM EST | Jordan Ecarma


Tesla Motors could potentially bargain with the state of Texas to be allowed to build company showrooms in exchange for bringing the planned billion-dollar "Gigafactory" to the Lone Star State, a dealership CEO says.

The burgeoning startup is planning the largest-ever battery factory to produce lithium-ion batteries and electric storage applications, a production that would create 6,500 jobs and bring some $4 billion into the state, CNBC reported.

Tesla is reportedly looking at Arizona, Nevada, New Mexico and Texas for the factory, inspiring questions as to whether Texas could work out a deal with the electric car company.

According to AutoNation Chairman and CEO Mike Jackson, the Palo Alto, Calif.-based carmaker should be allowed to market its popular Model S directly to customers even though company showrooms cut out dealerships.

"Tesla should have the right to decide how it wants to retail its vehicles ... and that should include the great state of Texas," Jackson told CNBC.

"I do not view [Tesla] as a threat to franchise auto dealers or a threat to AutoNation in any way," he said, noting that his company "has not supported or helped any of the entities that are legally resisting Tesla's retail model."

Jackson is also open to selling the Model S through his dealerships.

 "I would not be surprised if my phone rang and Elon wanted to talk about retailing through AutoNation. [He's] indicated that he thinks that's a possibility," he told CNBC.

Tesla expects to deliver more than 35,000 Model S cars this year for a 55 percent jump from 2013.

The factory will produce enough batteries to power approximately 500,000 vehicles every year. Tesla said by 2020 it expects to "produce more lithium-ion batteries annually than were produced worldwide in 2013."

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