Dallas-Area Officials Hoping to Lure Tesla's Gigafactory to Dallas

Categories: Transportation

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The conventional wisdom at the moment is that when Tesla Motors gets around to announcing details of its highly coveted, $5 billion battery gigafactory -- the type of economic development that gives red-state governors with ill-concealed presidential aspirations wet dreams -- it will land in one of two places: Reno or San Antonio. Or maybe both.

Dallas has never really been in the conversation, not publicly anyway, at least not until this week when the North Central Texas Council of Governments posted its agenda for Thursday's meeting of the Regional Transportation Council. There, buried in a PDF labeled "correspondence," was a letter from NCTCOG transportation director Michael Morris to Dallas County development chief Rick Loessberg.

"It has recently come to my attention that Tesla Motors is in the process of selecting a location for manufacturing batteries and a site in southern Dallas County may be placed under consideration," Morris writes before going on to pledge that nearly $200 million will be available to finish planned transportation improvements in the vicinity of the site if Tesla picks the Dallas.

As far as incentives go, that's a far cry from the $800 million reportedly ponied up by San Antonio, though certainly Dallas could make the pot sweeter if it chooses.

Tesla hasn't publicly said that it's considering Dallas. It also hasn't said that it isn't. Officially, the entire states of Arizona, Nevada, New Mexico and Texas are still in play.

John Boyd, the principal of the Providence, New Jersey, site-selection firm The Boyd Co., says a Tesla factory in Dallas isn't out of the question. His firm isn't working with Tesla (hence his willingness to talk), but has been following the process closely.

Dallas, like San Antonio, is in a low-tax, low-regulation state that would make it easy to do business, and, thanks largely to Toyota's recent move to Plano, is an "emerging auto industry cluster."

San Antonio, however, has several built-in advantages that Boyd says Dallas probably won't be able to overcome. Industrial acreage in Dallas, for example, costs about 10 percent more. Dallas also lacks San Antonio's military bases, which offer a built-in population of relatively skilled labor to fill the 6,500 jobs promised by the gigafactory. San Antonio also has strong intermodal facilities and is closer to the Port of Houston, which will be key as Tesla broadens its reach overseas.

"I think obviously the leading contender in Texas is San Antonio," Boyd says, [but] Tesla would be wise to consider the metroplex" to ensure its done its due diligence if nothing else.

Asked to put odds on Dallas acquiring the factory, Boyd demurred. A Tesla factory in San Antonio would benefit Dallas and everyone else along the Interstate 35 corridor. And who knows? Maybe it would convince the Texas Legislature to let the automaker actually sell cars to people.

Send your story tips to the author, Eric Nicholson.

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32 comments
JackB125
JackB125

"Dallas, like San Antonio, is in a low-tax, low-regulation state that would make it easy to do business...


"low-regulation" except for the most restrictive automobile franchise laws in the nation!


After WWII, the US auto manufacturers needed all of their capital for production expansions. Consequently, they decided to outsource sales and distribution to independent franchise dealers. These dealers were heavily enticed to make huge capital investments in their dealerships. Once the manufacturing expansions started to slow down, some of the manufacturers began making moves to pick up some of the sales and distribution of their products in direct competition with the previously enticed dealers. The dealers cried "foul" and went to their state legislatures seeking protection from that competition. Thus, the state automobile franchise laws were created.


At the time that these laws were written, I believe that they were the fair thing to do. However, they should have been written in such a way that the protection was temporary. It is very poor economic policy to limit competition in a free market forever. But, that has been the result with these laws so far.


In any case, since Tesla never had any dealerships to protect, they NEVER fell under the original intent of these laws. The dealerships and their associations, however, are now using the laws for pure economic rent-seeking. This unfortunate behavior has lead to a state mandated middleman that in many cases adds unnecessary burdens and expenses to the process of buying a new vehicle.


These dealership, anti-competitive protections should have been repealed decades ago, But, they have been kept in place through special interest lobbying and political campaign contributions. And, who ultimately pays for all the lobbying and political contributions? The consumer of course. The very same consumer that lothes the system that the state is mandating.


And now, these Texas laws are putting the Texas bids for the Gigafactory at extreme risk. $5,000,000,000 (yes, BILLIONS -- 9 following zeros) of investment dollars and 6,500 good paying Texas jobs are what is at risk.


This is too important for Texas to let a misguided status quo remain in place. I believe that Governor Perry should call a special legislative session immediately. The agenda should contain one item -- a straight up or down vote to repeal the automobile franchise laws.


Remember, repealing these laws does NOT dismantle the independent franchise system. Rather, it only opens the market up to additional sales and distribution business models. The dealerships that truly add value to the process of purchasing a new vehicle should do just fine in a competitive market. Those dealerships that do not add value will fail, freeing up resources for more productive purposes. This is how a free market works. 

sumnerk
sumnerk

Ummm, hate to break the news but construction has already started on a Tesla mega plant at the industrial complex just outside of Reno/Sparks Nevada to the east along I-80. They've been working at the location for the last couple weeks now. I have a few friends that have been doing 12-14 hour days 7 days a week.
I still have no clue why this hasn't been publicly announced elsewhere, it's not like it's any secret here.

bvckvs
bvckvs topcommenter

They'll fail on this, just as they failed to get the Olympics or even the RNC convention.  There's just no way that Tesla is going to subject their employees to the fundamentalist Christian laws in Texas.  Beyond that, they're not going to want to have high school "graduates" who can't do algebra, or who are being discouraged from going to college.

MikeWestEast
MikeWestEast

Why would we want the largest battery factory in history here, especially one that will be doing as much recycling as manufacturing?  Those places are toxic wastelands.  I am sure Tesla will follow the laws and regulations, but why bring it near a city.  It is an unnecessary risk.  Put it in the middle of nowhere.  We have plenty of nowhere in Texas to put this thing.

MaxNoDifference
MaxNoDifference

Another potential impediment to bringing it to southern Dallas County is that pesky equity thing.  Can you say "Inland Port"?

primi_timpano
primi_timpano topcommenter

I think Guv'ner Perry has screwed this pooch.

RTGolden1
RTGolden1 topcommenter

Great.  Maybe then So Dallas can get water service and a grocery store.

wcvemail
wcvemail

Why in the wide, wide world of Ayn Rand would a businessperson set up a factory in which he can't sell the factory output, thanks to the car dealers' lobby?

mcdallas
mcdallas

First!  I only did it to irritate that other lady, first.

TheRuddSki
TheRuddSki topcommenter

@CuriousBystander

What's the frequency?

wcvemail
wcvemail

@CuriousBystander

Is there porn, or a Kardashian thing, or a Brittney Spears thing, or a White House memo? Is it bigger than a bread box? Does anybody know what a bread box even is, any more? What color is it? Am I getting warmer, or colder? Do you have an opinion about the mysterious p. 10? 

karmamule
karmamule

@JackB125 It does seem like the height of arrogance to court the Tesla gigafactory when you don't even allow them to sell their cars in your state.

wcvemail
wcvemail

@JackB125

You didn't get a dealers' lobbyist check or even a fancy lunch. You don't get a vote. There's a connection between those two.

J_A_
J_A_

That's great Reno needs it

wparkman
wparkman

@sumnerk I've tried to get a close look at "Project Tiger" on Portofino Drive but the guard shack blocks access to the canyon.  The other end of the canyon is blocked by concrete with "trespassers will be arrested" signs all over.  Very frustrating.

wparkman
wparkman

@sumnerk I've tried to get a close look at "Project Tiger" on Portofino Drive but the guard blocks access to the canyon.  The other end of the canyon is blocked by concrete with "trespassers will be arrested" signs all over.  Very frustrating.

theslowpath
theslowpath

@MikeWestEast Lithium based cells are quite a bit safer than lead battery plants (like Frisco's issue)

MaxNoDifference
MaxNoDifference

@MikeWestEast Put it in Ellis County.  They can store the waste in the remains of the Superconducting Super Collider.

monstruss
monstruss

@wcvemail Because the real money is in the batteries. with the patents for the Tesla effectively opened up, Elon Musk is going to make a shitload when other car companies take that work based around his batteries and start mass-producing their own electric cars. 

ColonelAngus
ColonelAngus

@wcvemail  Because that is the case in 48 of 50 states.  Not saying it is right, BTW.


In 48 states, according to the National Automobile Dealers Association (NADA), franchise laws forbid or severely restrict the ability of automakers to sell vehicles directly to the public.

The specific wording of those laws varies from state to state, but most are based on the rationale that letting big automakers sell cars to customers would stifle competition.

Anon.
Anon.

@casiepierce  

Not the agenda. That agenda item. That would be electronic item 3.5 under regular agenda item 3 subsection 15. The full agendas for the RTC often run to hundreds of pages. That seven page thing is what is put out for public consumption. You have to read the agendas carefully.


Michael Morris wants to build another unneeded toll road to benefit a private toll road developer. He says so in a letter to Public Werks in the correspondence section of the agenda. Electronic Item 3.5, page 10.


Do I have to spell it out for you folks? Look for it here.

www.nctcog.org 

First one to find the date on that letter wins a virtual beer!

RTGolden1
RTGolden1 topcommenter

@karmamule @JackB125 Most states, indeed all four of the states contending for the battery plant, have the same laws in effect.  NM and AZ, as of March 14, were only considering changes to existing legislation.  The direct sales angle is not a big consideration for Tesla, as they would have to contend with it almost anywhere they choose to put the plant.

fred.garvin.mp.713
fred.garvin.mp.713

I gotta believe for Musk that's going to be a major point of consideration. The direct sales blockage is the major stumbling block for Tesla now, not range anxiety.

Just read Consumer Reports' most recent issue where they highlight how badly dealerships promote electric cars, and that's from brands they sell. If that's the case, then they're definitely not going to sell an off-brand model.

wcvemail
wcvemail

@fred.garvin.mp.713

See below for Monstruss' reasonable take on Musk's ultimate goal, to make the batteries, not the cars. That would explain partially why Musk released the patents for the surrounding technology.

As for elec cars themselves -- yeah, I'm afraid you're right, for quite some time to come. 

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