Why You Can’t Buy a Tesla in Texas

If you live in Texas and want to make the switch to an electric vehicle, you may have heard that doing so is not allowed, especially when it comes to Teslas. This rumor isn’t entirely true, as it is entirely legal to own and operate a Tesla or other electric vehicle in Texas

What you cannot do is purchase a Tesla in-store in the state of Texas. Tesla’s buying process happens entirely online, which goes against Texas’ law that prohibits car companies from selling directly to consumers. You can buy the car in a state other than Texas or online, with the option of picking it up or a no-cost delivery to your home in Texas. 

Tesla Motors Model S Sedan Electric Red Car On March 31 2015.
Tesla Motors Model S Sedan Electric Red Car On March 31, 2015.

Why Can’t You Buy a Tesla in Texas?

If you live in Texas, you can’t directly purchase a Tesla in the state because Texas has a law that prohibits manufacturers from selling directly to consumers. You are, however, able to own and operate a Tesla in the state.

Texas created the law to protect and encourage car dealerships. Texas believes independent dealerships provide economic value to the surrounding community. This reasoning is because they employ individuals and allow money to circulate within the area.

The Texas law argues that without a dealership, money does not return to the community the way it does with dealerships. 

Tesla does not operate any dealerships and exclusively sells its vehicles directly to the consumer. This policy is why you technically cannot buy a Tesla in Texas in a store; in other words, there are no Tesla stores in Texas.

However, it’s very common for people to purchase a Tesla online or in another state and then have the vehicle delivered to their home in Texas.

So, What Is a Tesla?

Tesla is the name of the car manufacturer and the short-hand moniker for the cars this company makes. Tesla specializes in and exclusively makes electric vehicles.

Electric cars utilize batteries that you can charge, rather than traditional cars which use gas and a combustion engine

Are There Tesla Dealerships?

Tesla does not work with independent dealerships. This policy isn’t exclusive to Texas, as the company does not partner with dealerships in any state.

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The typical car-buying process includes using a dealership not only to help make your decision but also to purchase the car through that dealership. With Tesla, the entire buying process happens online or at their own stores.

Apart from these stores, which Texas does not allow, Tesla has showrooms that allow you to experience and make your decision by viewing its models in person. There are several Tesla showrooms located in Texas. 

Are There Tesla Factories in Texas?

For those familiar with Tesla, you may have heard that the company has strengthened its ties to Texas in recent years. The company moved its headquarters from California to Austin, Texas in 2021. Tesla also opened its first Texas factory in Austin, Texas in 2022. 

How Do You Buy a Tesla if You Live in Texas?

So, how can you purchase a Tesla while residing in Texas? Here are the basic steps to getting a Tesla online in Texas.

Pick your model

You can research the available models using Tesla’s website. You can also visit one of Tesla’s Texas showrooms in Austin, Dallas, San Antonia, or Houston to get up close and personal with the cars. 

Purchase the car through the website

The only way to purchase a Tesla is through the company’s website, as they do not operate any dealerships, and you cannot buy cars from their showrooms. It will be an out-of-state purchase. 

When purchasing from Tesla, the site will allow you to pick the nearest service where you can pick it up. The service center will be in the state nearest to you which is not Texas. There is also an option to have the car delivered directly to your residence in Texas

Register your vehicle

After purchasing your vehicle, Tesla will begin sending you emails on how to complete the next steps, including registering your vehicle in Texas. The company will provide instructions and documents needed to complete this step.

Kingman Arizona Usa May 12 2016 Multiple Tesla Chargers In Arizona. Tesla Supercharger Is A 480 Volt Fast Charging Station From Tesla Inc. For Their All Electric Cars.
Kingman Arizona Usa May 12 2016 Multiple Tesla Chargers In Arizona. Tesla Supercharger Is A 480-Volt Fast Charging Station From Tesla Inc. For Their All-Electric Cars.

Buying a Tesla in Texas FAQs

Here are the most common questions about buying and owning a Tesla model in Texas and other US states. 

What states in the US can you buy a Tesla?

There are currently 16 states that have laws preventing Tesla’s direct sales. These states are Alabama, Arkansas, Connecticut, Iowa, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Carolina, South Dakota, and Texas. In all other US states, you can buy a Tesla comfortably at a Tesla store or online.

How much is tax on a Tesla in Texas?

When you purchase a vehicle in the state of Texas, you need to pay 6.25% of the sales value in taxes. The same percentage applies if you have bought the car in another state and are bringing it into the state. So, this is the tax value you will need to pay when purchasing a Tesla in Texas.

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Do I have to pay taxes twice if I buy a car out of state?

No. You pay taxes on the state where you have registered the vehicle. If you buy your Tesla (or any other vehicle) out of state, you can still register it in Texas by providing your Texas address at the moment of the purchase. This way, you will pay taxes in the state where you live.

Do Texas’ electric car incentives apply to Teslas?

Many states have created incentives for consumers to make the switch to environmentally friendly electric vehicles. These incentives typically come in the form of rebates, but Teslas do not qualify for these rebates. 

Although Tesla is one of the most well-known companies, it is not the only car manufacturer making electric vehicles. Many popular car brands have successfully made their way into the electric vehicle market and are eligible for this rebate.

The Texas rebate incentive provides up to $5000 towards buying a new electric vehicle.