Texas Says No to Tesla But That's Not the Only State Denying Elon Musk Direct Sales
Despite racking up award after award and selling the most electric cars in the nation, Elon Musk's Tesla Motors has long been denied direct sales of its car in many states, including Texas, whose governor just reiterated that the door is definitely still shut.
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Tesla prefers to sell its vehicles by cutting out the middleman of franchised car dealerships. For those who want one, Tesla cars can be bought online or from a company-owned store from states that allow direct sales.
However, many states have blocked Tesla's approach, saying they prefer to distribute cars to consumers the conventional way in an effort to protect small businesses. For instance, West Virgina blocked direct sales of Tesla cars because it wants the EV maker "to join the ranks of dealerships and play by the same rules and requirements and laws we must do," said West Virginia Automobile & Truck Dealers Association president Ruth Lemmon.
Now, in a new interview on Bloomberg Radio, Texas Gov. Greg Abbott described why Tesla continues to receive Texas' cold shoulder.
“Texas has a very robust, very open, very effective automobile sector that seems like it’s working quite well the way that it is,” Abbott said. “If you’re going to have a breakdown in a car, you need to have a car dealership there to make sure that the vehicle is going to be taken care of. We haven’t seen that from Tesla.”
In response, Tesla spokesman Ricardo Reyes told Bloomberg that the company has four maintenance centers in Texas that have earned high marks for service, and is "[looking] forward to working as a business in Texas," and added "it’s just a matter of time.”
Texas has shunned the electric car company since 2013. As AutoBlog puts it, the state has the "most stringent laws prohibiting automakers from owning dealerships," and even Ford was blocked from direct sales by the Texas government in the 1990s, The Washington Post reported.
It just so happens that most states have some version of this law. Some states have been lenient to Tesla, but if you check out the graphic below from Mojo Motors, you'll notice that more than half the country (26 states) has blocked Tesla's preferred sales approach.
According to Mojo Motors, in the those states (colored red), "Tesla can have service centers, superchargers, and stores and galleries in these states but cannot sell or deliver cars. For example, you can check out a Tesla at Short Hills Mall in New Jersey, but you cannot take a test drive or discuss pricing with a salesperson."
Interestingly, as CheatSheet noticed, many states that have blocked direct sales tend to have Republican lawmakers. According to CheatSheet's post, "Unfortunately, politics plays a heavy-handed role as to where automakers can and can’t sell their vehicles." Texas, in particular, happens to have a powerful car dealership lobby.
Texas has the country's second-biggest slice of the automobile market after California, and Tesla has been lobbying the Lone Star State to end its preference for franchised dealership for the past two years, which Tesla claims is an "unfair monopoly," according to Bloomberg Radio. Musk is also trying to change car dealership rules on the federal level.
Texans looking to buy the environmentally friendly ride have to jump through impressive loopholes—and they do. Tesla told Bloomberg that of the 78,000 Model S vehicles around the world, there are roughly 3,000 driving around in Texas.
Incidentally, former Texas Gov. Rick Perry was a big fan of the EV maker and wanted to lift the state's direct sales ban. He even drove around in a Model S in a public stunt to court construction of Musk's $5 billion Gigafactory that would have created thousands and thousands of jobs.
Tesla ultimately went with Nevada for their enormous battery plant, which will probably earn the title of world's largest factory once construction is complete. Diarmuid O’Connell, vice president of business development for Tesla, told Huffington Post at the time that Texas' ban on direct sales "doesn't make us feel good as we look to build a plant."
Nevada's win is Rick Perry's loss with the Tesla Gigafactory deal http://t.co/qEja7x4Y9D
— HuffPost Business (@HuffPostBiz) September 6, 2014
Ironically, Gov. Abbott also said during his Bloomberg Radio appearance that he's encouraging other businesses to set up shop within its borders.
"We look at the macroeconomics, and we want to make sure that we continue to have job growth in the state of Texas and so we look at ways that we can generate revenue, attract more business and hold down costs," Abbott said. "And that's why we passed a budget in the state of Texas that cut taxes making the costs of doing business in Texas even better."
"Texas is the quintessential entrepreneurial state," he continued. "If you look at the macro picture, there are so many entrepreneurs who want to start a business, grow a business, unfettered by overreaching heavy-handed government regulations. Texas is that kind of place."
Just not for Tesla, we might add.
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A stretch of coastline in the Philippine capital, Manila has received backlash from environmentalists. The heavily polluted Manila Bay area, which had been slated for cleanup, has become the site of a controversial 500-meter (1,600-foot) stretch of white sand beach.
Sand Makeup Crucial for Ecosystems<p>While UNEP/GRID-Geneva generally supports finding <a href="https://www.dw.com/en/not-enough-sand-for-construction-industry-despite-abundance/a-49342942" target="_blank" rel="noopener noreferrer">alternative sources of sand</a> so as not to disrupt ecosystems in rivers and oceans when extracting them, Vander Velpen stressed it was vital to use sand which closely matches the makeup of the native sand to protect beach fauna.</p><p>"If you change the core characteristics of the native sand, the original sand, you need to do an environmental impact assessment (EIA) to find out how it's going to impact the ecosystem and nearby ecosystems," he told DW.</p><p>But according to Torres, such an assessment was not done in Manila.</p>
Beautification Stunt Instead of Proper Cleanup?<p>Manila Bay's waters are heavily polluted by oil and trash from nearby residential areas and ports. A huge "No swimming" sign warns visitors to stay away from the ocean.</p><p>Philippines' <a href="https://denr.gov.ph/index.php/priority-programs/manila-bay-clean-up/25-priority-programs/1825-frequently-ask-questions-faqs-on-the-dolomite-and-the-beach-nourishment-project" target="_blank">Department of Environment and Natural Resources (DENR)</a> has denied dolomite sand poses any risk to human health and the ecosystem.</p><p>However, scientists of the University of the Philippines have come forward disputing the DENR's claims. A <a href="https://biology.science.upd.edu.ph/index.php/ib-statement-regarding-dolomite-in-manila-bay/" target="_blank" rel="noopener noreferrer">statement by the Institute of Biology</a> said that using crushed dolomite did not address any of the rehabilitation phases and instead was "even more detrimental to the existing biodiversity as well as the communities in the area," pointing to the case of water birds. "The dumping of dolomite in Manila Bay has effectively covered part of the intertidal area used by the birds thereby reducing their habitat."</p><p>At peak migration season, Manila Bay is home to 90 aquatic bird species, including species of international conservation concern that are facing a very high extinction risk in the wild. </p><p>Authorities should focus on protecting and conserving biodiversity, the Institute of Biology added. "Rehabilitating mangroves is an example of a nature-based solution that is cheaper and more cost-effective than the dolomite dumping project," the scientists said.</p><p>Moreover, <a href="http://www.msi.upd.edu.ph/" target="_blank" rel="noopener noreferrer">the Marine Science Institute</a> has warned that prolonged inhalation of finer dust particles of dolomite could "cause chronic health effects," leading to discomfort in the chest, shortness of breath and coughing.</p><p>They also warned dolomite sand grains would erode during storms and be carried out to sea, essentially being washed away.</p>
Rehabilitation vs. Reclamation<p>Environmentalists say covering up the beach doesn't address the real issues of the bay. Torres and others believe the best way to clean up Manila Bay is not to add anything, but rather remove trash and pollution.</p><p>"There have been studies saying much of the waste comes from already collected waste — so these are open dump sites along the coast that get washed up because of the rain," Torres said.</p><p>She criticized the authorities for continuing to push reclamation projects she says are at odds with each other. These projects will affect large areas of mangrove forests, she said, and experts warn that this, in turn, exacerbates coastal erosion.</p><p>"If you've removed the areas that helped trap the sand, like mangrove forests, then the likelihood increases that you will have to nourish a beach. Same as building right up to the waterfront," said Vander Velpen of UNEP/GRID-Geneva.</p>
Plenty of Sand in the Sea?<p>The question of Manila's contentious white beach echoes larger questions about sand mining worldwide. <a href="https://unepgrid.ch/storage/app/media/documents/Sand_and_sustainability_UNEP_2019.pdf" target="_blank">Global sand consumption has tripled</a> over the past two decades, UNEP/GRID-Geneva has found. A huge chunk of it is now taken up by construction.</p><p>"Many operate on the assumption that natural sand is endless in its supply," said Vander Velpen.</p><p>Sand scarcity is a concern shared by Stefan Schimmels of <a href="https://www.fzk.uni-hannover.de/fzk_start.html?&L=1" target="_blank">Forschungszentrum Küste</a> who's done extensive research on shore nourishment to stop coastal erosion. And as climate change and rising sea levels are threatening coasts, demand for sand will grow even more.</p><p>A large study, the <a href="http://www.stencil-project.de/wp-content/uploads/2019/10/STENCIL_SWOT_Analyse_191026.pdf" target="_blank">Strategies and Tools for Environment-Friendly Shore Nourishments as Climate Change Impact Low-Regret Measures (STENCIL project)</a>, focused on the German island of Sylt, a popular vacation spot.</p><p>About 1 million cubic meter of sand per year is used to maintain the coastal area of Sylt, STENCIL project head Schimmels said. That's about 100 million 10-liter buckets of sand.</p><p>When sand was extracted off the coast of Sylt, underwater craters were formed. "You can still detect these craters even decades later," Schimmels told DW.</p><p>"Also when you add a couple of meters sand onto the beach — you essentially bury all things that do creep and fly," he said. "How quickly will they recover?" Schimmels said more research was needed as there was still too little known about long-term effects on the environment. </p>
Criticism Piling Up<p>As for Manila's artificial white sand, it looks like some might have already been blown away by a recent storm. DENR claims it wasn't washed away, but said that grayish sand, stones and other material had simply piled up over the dolomite sand. People in Manila have tweeted photos showing how the storm has ravaged the beach. </p>
<div id="adc0b" class="rm-shortcode" data-rm-shortcode-id="98f9390db6bb81cb421aaf0bb9d9a6fb"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1318816633280851969" data-partner="rebelmouse"><div style="margin:1em 0">Exactly one month after giving excited netizen a glimpse of Manila Bay white sands, look what happened now after ju… https://t.co/X0Z9i0bPB0</div> — M*A*S*H (@M*A*S*H)<a href="https://twitter.com/Magtira_Matibay/statuses/1318816633280851969">1603265362.0</a></blockquote></div><p>Authorities have been called tone-deaf for spending around 389 million pesos ($8 million) on a beach nourishment project in the middle of a raging pandemic.</p><p>An image of cake iced with the words "It really hurts - that's [worth] 389 million pesos?" has since gone viral.</p>
<div class="rm-shortcode" data-rm-shortcode-id="4387aad52ea316e4db7330052318ca2f"><div class="fb-post" data-href="https://www.facebook.com/theweekendpatisserie/posts/144564207350008"></div></div><p>"It's just a waste of precious resources," Torres said. </p><p>The environmental activist now also worries that she might be labeled a terrorist for speaking out under the <a href="https://www.dw.com/en/philippine-anti-terrorism-law-triggers-fear-of-massive-rights-abuses/a-53732140" target="_blank" rel="noopener noreferrer">Philippines' controversial new anti-terrorism law</a>. She says she could be arrested for inciting fear when talking about environmental dangers.</p>
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