Hunt for Tesla Cybertruck Factory: Could It Finally Break the Dealer Ban?
[March 13, 2020]
This week, Elon Musk announced that the hunt was on for a location for a new Gigafactory for the upcoming Cybertruck and eventually Model Y production. The vague general description of the location was somewhere in the “central USA.” This term is even more vague than “Midwest” or “Great Plains” or “Mid-South.” Current speculation is that the Nashville, Tennessee metropolitan area is the leading contender.
However, others believe Texas could be on the shortlist as well. There are two schools of thought on this. Texas is either firmly on the “blacklist” for the Texas Automobile Dealers Association’s (TADA) repeated and persistent antagonistic efforts to block Tesla from selling direct-to-consumers. Or, Elon Musk and Tesla are deliberately targeting the Lone Star state in order to achieve leverage with legislators and against TADA, essentially building a factory there in exchange for allowing Tesla to sell its cars directly in the state. It should be noted that SpaceX has a launch site in Boca Chica, Texas, close to Brownsville and the Mexico border.
The Cybertruck’s unorthodox styling has made for strong opinions about the vehicle, but Tesla states demand has exceeded expectations.
In Tennessee’s favor are that it has no explicit restriction on manufacturer-direct auto sales, and also that it is a right-to-work state, meaning that it partially side-steps political pressure to accept a unionized work force. However, it should be noted that General Motors has a UAW-represented plant in Spring Hill, and the UAW also worked hard to unionize the Volkswagen plant in Chattanooga, ultimately unsuccessfully.
Texas touts itself as being “business-friendly” and famously low-tax, low-regulation, and generally libertarian. However, when it comes to selling cars, TADA has an outsized influence on how car business is done in the state. Short of a court ruling, don’t expect TADA to give up the fight to keep Tesla out. Only recently did TADA capitulate enough to formally allow service and delivery centers in the state, although because of the direct sales ban, buyers taking delivery in the state still have to go through a Byzantine purchase and registration process not required for cars purchased through franchised dealers.
The Cybertruck will boast an active suspension as well as storage compartments within the truck’s bed.
Logistically and symbolically, both locations have a lot going for them. Texas is the single largest light truck market in the country, so from that standpoint it would be a natural location for the Cybertruck plant. Nashville is the hub of the I-40 and I-65 freeways, two major commercial and transportation corridors for the Midwest and South. The fact that neither the state nor the state dealer association has deliberately thrown up roadblocks blocking or complicating Tesla’s direct sales model is an added bonus.
Whichever area gets the Cybertruck plant will get a lot of attention, notoriety, and likely economic development, both through tax incentives and the ripple effect of having a workforce and suppliers supporting the local economy. May the best location win.
(Images courtesy Tesla)
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