Why Tesla's Vehicles Cannot Avail EV Rebates In Home State Texas

Tesla, Inc.'s TSLA electric vehicles may not be eligible for rebates in its adopted home state of Texas.

What Happened: Tesla did not feature in the Texas Commission on Environmental Quality's list of EVs and plug-in hybrids that qualify for a rebate of up to $2,500 under the "Light-Duty Motor Vehicle Purchase or Lease Incentive Program."

The list, however, is extensive, including 142 different models from several car manufacturers, including BMW AG BMWYY, Volkswagen AG's VWAGY Porsche and Audi, and Ford Motor Company F.

Why The Snub? Tesla's non-inclusion is due to Texas' franchise dealer law that mandates that vehicles should be purchased through an in-state dealer and not directly from the manufacturer, Drive Tesla Canada reported, citing Laura Lopez, media and community relations manager of TCEQ.

Tesla, which otherwise follows a direct sales model, is precluded from selling its cars directly to buyers in Texas due to this law.

Related Link: Why This Analyst Thinks Tesla's June Quarter Deliveries Will Be Better Than Feared

This should come as a disappointment for Tesla, which moved its corporate headquarters from California to the Lone Star State in December 2021. Earlier this year, the company also opened its Giga Austin manufacturing plant in the state. The decision to shift to Texas was to increase Musk's focus on the Starship spacecraft — which is being built in Boca Chica, Texas — and Giga Texas production.

It was also speculated that Musk may have in his mind the tax advantage, as Texas is among the states that do not have individual income tax as opposed to California, which is among the states with the highest personal income tax rates.

Price Action: Tesla closed Monday's session 1.60% higher at $714.84, according to Benzinga Pro data.