Texans who hope to receive a $2,500 electric car incentive on Teslas are out of luck.
Electric-car shoppers are finding an unwelcome surprise in Texas' new alternative-fuel incentives. The nation's most popular electric car isn't eligible for the $2,500 cash-back deal the state is offering.
Tesla, whose Model 3 now tops electric vehicle sales lists, has bucked the Lone Star State's requirement that cars be sold through dealerships. Started by PayPal cofounder Elon Musk, Tesla takes a newer approach by selling directly to customers via the internet.
However, the Texas legislation creating the alternative-fuel incentive applies only to cars sold in Texas. And although Teslas are often seen on local roads, they aren't sold in the state in the same way as other cars.
“I jumped on that incentive and got really excited for a minute,” said Jeb Sims, who expects to own a Model 3 soon. “And then I saw that Tesla was excluded. But it's not a deal breaker.”
The 41-year-old software development manager from Garland said he's been on the waiting list for a Model 3 since day one. Actually, Sims said, he placed his $1,000 deposit during Musk's video presentation unveiling the Model 3 in 2016.
The Texas Commission on Environmental Quality, the agency that manages the electric-vehicle incentive program, has received enough questions about Teslas that officials posted a partial explanation on the commission's website.
Since 2013, Tesla has lobbied Texas legislators to get the state's car sales rules changed. And the California car company has had success in convincing many prominent Republicans.
Gov. Rick Perry said in 2014 that the state's law prohibiting direct sales of cars was “antiquated” and should be reconsidered.
Around that time, he was unsuccessfully trying to persuade Tesla to build its multibillion-dollar battery factory in Texas; the so-called gigafactory and its thousands of jobs eventually went to Nevada.
Also, about 90 percent of delegates to the Texas GOP convention in 2016 agreed to wording in the party platform that endorsed direct sales. Still, the state's more than 1,300 new car and truck dealer ships—often large political donors that have multi million-dollar investments at stake — have won such fights.
“I love Texas. I truly do,” Sims said. “But there are some things we're backwards on. This is one of them.”
The Texas Automobile Dealers Association argues that the state's franchise law helps “prevent monopolies and promote competition in vehicle pricing and service to the consumer.” And the group highlights the employment and taxes generated by dealerships.
Local and state association officials said they would welcome Tesla but want the automaker to play by the same rules as everyone else.
Even with the restrictions, Tesla has said in the past that Texas is a strong market.
The Tesla issue isn't the only quirk in Texas' new alternative-fuel incentives.
The program also provides $5,000 incentives for the purchase of cars or trucks powered by compressed natural gas or propane. Those are relatively rare and generally used as fleet vehicles, and fleet vehicles aren't eligible for the incentives.
A 2016 report by the Texas Department of Motor Vehicles said there were 3,889 natural gas and 1,038 propane vehicles in the state. The report said those numbers wouldn't include some vehicles that were converted after initial sale.
On the TCEQ website, the agency lists just one vehicle — the Dodge Ram 2500 — as eligible for the natural gas or propane incentives. However, the TCEQ did say it was reviewing manufacturers' reportsof conversions.
There are relatively few public natural gas stations, just 80 in Texas, according to the U.S. Department of Energy.