Why Texas’ $2,500 electric car incentive won’t apply if you buy the most popular brand

‘Antiquated’ law

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 dealerships — often large political donors who have multimillion-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 also 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.

Tesla has storefronts or “galleries” in Legacy West, NorthPark Center and other places around the state. The company describes those locations as “education centers” rather than dealerships. Prospective buyers can quiz staff members about the cars and examine them in person, but they can’t arrange sales.

And when a car is purchased online, it is delivered to a Texas center with a California registration. The new owner then has to register it in Texas.

Other quirks in the law

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’ reports of conversions.

There are relatively few public natural gas stations, just 80 in Texas, according to the U.S. Department of Energy. That same database lists 1,000 public electric vehicle charging stations, and 2,678 charging outlets in Texas.

The state DMV report said Texas had 8,397 electric cars in 2016. The electric-car incentives also include plug-in hybrids, which aren’t counted in that number.

The $2,500 incentives also apply to hydrogen fuel cell vehicles. In 2016, state registration records showed zero in the state, and the TCEQ listed no eligible hydrogen fuel cell cars on its incentives list.

Even if someone bought one, they’d be hard pressed to fill up. Officials with Energy Institute at the University of Texas at Austin said they have the state’s lone hydrogen vehicle fueling station.

And it is not open to the public. 

Nino Plevnik

I am an electric cars lover. I love our planet and want to leave it in good condition to our children. One of the good ways to do this is to reduce harmful emissions into the atmosphere. As a technical person I worked on computers, hardware maintenance and programming. Otherwise I like advanced technologies, music, books, movies, life and nice weather.

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