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Tesla revs up plan for new $2.5 million showroom in South Austin

Tesla revs up plan for new $2.5 million showroom in South Austin

Tesla store at Santana Row San Jose California
Tesla's heading south for its third Austin showroom. Photo courtesy of Santana Row

Tesla, the high-flying maker of electric vehicles, is driving into South Austin with its third local showroom.

A filing with the State of Texas shows Tesla plans a $2.5 million project to convert a structure at 500 E. St. Elmo Rd. into a nearly 30,000-square-foot showroom. Work is expected to start June 15 and be completed September 15.

Tesla already operates showrooms at the Domain in North Austin and at Pond Springs Road and Research Boulevard in Northwest Austin. 

Under state law, Tesla is prohibited from selling vehicles directly to customers in Texas. It can, however, allow consumers to view vehicles in showrooms but can’t allow test drives. This differs from traditional auto dealerships in Texas, which can sell directly to customers and let them take vehicles on test drives.

During the 2021 Texas legislative session, Tesla is expected to once again push for the direct sale of its vehicles in the Lone Star State. The Texas Automobile Dealers Association would almost certainly fight that effort.

“Tesla has long used an online model for the sale of their vehicles, and nothing in Texas law prevents a Texas consumer from purchasing a Tesla online and having it delivered to them in the state,” Jennifer Stevens, a spokeswoman for the Texas Automobile Dealers Association, tells the Teslarati website.

Tesla may gain more legislative support for its position after beginning construction last year on a $1.1 billion vehicle manufacturing plant just east of Austin. Under current state law, Tesla would have to ship Austin-made vehicles out of state before they could be sold to Texas buyers. 

“Of course, it is … possible that even prior to the final decision of picking Austin as the site of its next vehicle factory, Tesla and Texas already had a deal that would allow the electric car maker to sell its vehicles directly to customers residing in the state,” Teslarati notes. “It’s very difficult to imagine that Tesla and executives such as Elon Musk would be amenable to a direct sales ban, after all, since the company would be producing vehicles in Texas.”

The new Austin factory, will be situated on about 2,100 acres along the State Highway 130 toll road near Austin-Bergstrom International Airport, will produce Tesla’s Model Y car, Cybertruck pickup truck, and Semi tractor-trailer.