Connect with us

News

States banning Tesla sales stand to lose millions in tax revenue each year

Photo credit: Delanman via Twitter

Published

on

Tesla’s unique business model allows them to sell vehicles directly to consumers through both retail locations and Tesla’s online design studio. Direct-to-consumer sales of its vehicles have led to some turbulence with existing car dealerships in many states, including Utah, Louisiana, Connecticut, Texas and Michigan. New Jersey allowed Tesla to open direct sales in the state in 2015, but with conditions. New Jersey’s legislation limited the number of direct-to-consumer dealerships per manufacturer to four stores and required at least one service center in the state. Tesla CEO Elon Musk once compared local car dealers to a mafia protection racket, stating in a Tesla blog post, “The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures ‘consumer protection’…Unless they are referring to the mafia version of ‘protection’, this is obviously untrue.”

Tesla recently launched a lawsuit to overturn a sales ban put into effect in Michigan in 2014 that prevents the Elon Musk-led electric carmaker from selling directly to consumers within the state. The greatest opposition against Tesla’s plea for direct sales in Michigan comes from both auto dealers and manufacturers, who argue that Tesla disrupts the traditional franchise dealership model.

Courtesy of Teslanomics.co

Ironically, Michigan and Texas which bans Tesla’s direct sales model have public pensions that are significant investors in the Silicon Valley company. However, that isn’t the only financial interest states have in Tesla. All states in the US rely heavily on sales tax to generate revenue. States without stores are forcing owners to purchase and service their vehicles out-of-state, missing out on sales tax in the process, a major revenue loss. 

Advertisement

Source: Bloomberg, September 2016

Bill Wolters, of the Texas Automobile Dealers Association, is claiming that the introduction of Tesla into the Texas car market would “reduce competition”, and will incur costs for Texas. However, this argument assumes that dealers are creating added value for their consumers, and if that argument holds, then dealers should be able to keep customers in the market after Tesla enters. Additionally, Tesla is competing against other manufacturers and not franchises.  

Racecar driver and environmental activist Leilani Munter protest’s North Carolina’s ban on Tesla’s direct sales model (Photo: Medium/Leilani Munter)

Out of a presumed 400,000 reservations for the Tesla Model 3, it is estimated that roughly half originate from the United States, according to the distribution of early Model 3 reservation data from Model3Tracker.info. Using a loosely estimated assumption of Tesla Model 3 reservations originating from banned states via Model3.ocasual.com, we get the following numbers: 1,250 in Louisiana, 2,980 in Connecticut, 3,076 in Utah, 15,670 in Texas, and 4,230 in Michigan.

The sales tax for Michigan is 6%, Louisiana is 9%, Connecticut is 6.35%, Utah is 4.7%, and Texas is 6.25%

This equates to a loss of $8,883,000 for Michigan, $3,937,500 for Louisiana, $34,278,125 for Texas, $6,623,050 for Connecticut, and $5,060,020 for Utah. That’s a total of $59,791,695 in loss revenue, which does not factor in current sales of Model S and Model X. 

States with Tesla Ban Sales Tax Estimated Tesla Model 3 Reservations Projected state revenue loss (in dollars)
Louisiana 9% 1250 $3,937,500
Texas 6.25% 15670 $34,278,125
Michigan 6% 4230 $8,883,000
Connecticut 6.35% 2980 $6,623,050
Utah 4.70% 3076 $5,060,020

 

Navigant Research believes that sales electric vehicles, including hybrid/plug-in hybrid, are set to comprise 9 percent of total vehicle sale by 2025. Currently, EVs make up 3% of total vehicle sales, but the number in 2016 saw a 36 percent increase in sales in the US alone. In 2016, 4,500 EVs were sold in Texas, 2,470 in Michigan, 270 in Louisiana, 1,452 in Connecticut, 1,132 in Utah, and 70 in West Virginia. Texas, Connecticut, and Michigan ranked among states with some of the highest EV sales. Of electric vehicles sold total in 2016, the Tesla Model S was the leading electric vehicle with ringing in at 29,156 vehicles. The Tesla Model S also outsold its entire class of vehicles, combined. Tesla is expecting high demand for Model 3, which will start at roughly half the cost of the Model S.

Advertisement

Source: Topspeed.com

There are currently 223,319 estimated Model 3 reservations in the United States, far greater than the sales of comparable vehicles. The BMW 3 and 4 series which sold around 106,000 vehicles in 2016 and the Mercedes C-Class sold around 77,000 vehicles in 2016. Tesla CEO Elon Musk is expecting to produce 500,000 vehicles in 2018 and tens of thousands this year (Tesla hasn’t released Model 3 production guidance for 2017). Musk’s expectations could make the Model 3 the highest selling vehicle in its class in both 2017 and 2018. The states that ban Tesla dealerships not only miss out on sales tax revenue from Tesla vehicles but in turn create an inconvenience for residents. By instating a direct sales ban on Tesla before the launch of Tesla Model 3, states will not only lose millions of dollars in sales revenue per year but also interfere with and disrupt free market competition and consumer activities.

Feature image courtesy of Delanman via Twitter.

Advertisement
Comments

News

Tesla Full Self-Driving shows stunning maneuver in Europe to silence skeptics

In a striking demonstration of autonomous driving prowess, Tesla’s Full Self-Driving (FSD) system recently showcased its capabilities on the narrow rural roads of the Netherlands. Captured in two in-car videos, the system encountered scenarios that would challenge even the most experienced human drivers.

Published

on

Credit: Tesla

Tesla Full Self-Driving, fresh on the heels of its approval for operation on European roads for the first time, showed off a stunning maneuver that will certainly silence any skeptics on the continent.

Fresh off its approval in the Netherlands, Full Self-Driving is working toward a significant expansion into more parts of Europe.

In a striking demonstration of autonomous driving prowess, Tesla’s Full Self-Driving (FSD) system recently showcased its capabilities on the narrow rural roads of the Netherlands. Captured in two in-car videos, the system encountered scenarios that would challenge even the most experienced human drivers.

In the first clip, a wide tractor occupied more than half the lane on a tight two-way road. Rather than braking abruptly or forcing a collision risk, FSD smoothly edged the vehicle onto the adjacent bike path—using the extra space with precision—before seamlessly returning to the lane once clear.

Advertisement

The second clip was equally demanding: while overtaking a group of cyclists, an oncoming car approached at speed.

FSD maintained a safe, minimal buffer to the cyclists while timing the pass perfectly, avoiding any swerve or hesitation that could unsettle passengers or other road users.

Advertisement

This maneuver highlights FSD’s advanced spatial reasoning and predictive planning. On roads often under three meters wide, with no room for error, the system calculated available clearance in real time, incorporated shoulder and path geometry, and executed a controlled deviation without compromising safety.

It treated the bike path as a legitimate extension of navigable space, something many drivers might hesitate to do, while respecting Dutch road norms and cyclist priority.

Such feats align closely with a growing library of impressive FSD maneuvers documented on camera worldwide.

In urban Amsterdam, for instance, FSD has navigated the world’s densest cyclist environments, weaving through hundreds of unpredictable bike movements on canal-side streets with tram tracks and pedestrians.

Advertisement

One uncut drive showed it yielding smoothly at crossings, overtaking where needed, and even handling a near-perfect auto-park in a tight residential spot, demonstrating the same low-speed precision seen in the rural clips.

Teslas using FSD have tackled turbo roundabouts in the Netherlands, complex multi-lane circles notorious for geometry challenges, merging confidently while yielding to traffic. Similar clips depict smooth handling of construction zones, emergency vehicle pull-overs, and gated parking barriers, where the car stops precisely, waits for clearance, and proceeds without driver input.

Collectively, these examples illustrate FSD’s evolution toward handling the unpredictable.

The rural Netherlands maneuvers aren’t isolated. Instead, they reflect a pattern of spatial awareness, cyclist deference, and traffic anticipation seen from city streets to highways.

Advertisement

As FSD continues refining through real-world data, videos like this one are certainly building a compelling case for its readiness on Europe’s varied roads.

Continue Reading

News

Tesla utilizes its ‘Rave Cave’ for new awesome safety feature

Part of the massive interior overhaul of both the Model 3 “Highland” and Model Y “Juniper” was the addition of interior accent lighting to help bring out the mood of the vehicle, increase the customization of the interior, and to create a unique listening experience.

Published

on

Credit: Tesla | X

Tesla is utilizing its ‘Rave Cave’ for an awesome new safety feature that will arrive with the upcoming Spring Update for 2026.

Part of the massive interior overhaul of both the Model 3 “Highland” and Model Y “Juniper” was the addition of interior accent lighting to help bring out the mood of the vehicle, increase the customization of the interior, and to create a unique listening experience.

Tesla added a Sync Lights feature that will strobe the accent strips with the beat of the music.

It is one of the most unique and one of the coolest non-functional features of a Tesla, as it does not improve the driving of the vehicle, but makes it a cool and personal addition to the interior.

Advertisement

However, Tesla is going to take it one step further, as the Rave Cave lights will now be used for blind spot recognition. This feature will be added as the Spring 2026 Update starts to roll out.

Advertisement

Tesla writes:

“Accent lights now turn red when an object is in your blind spot and your turn signal is engaged, or when an approaching object is detected while parked.”

This neat new safety feature will now increase the likelihood of a driver, who is operating their Tesla manually, of seeing the blind spot warnings that are currently available on the A pillar and on the center touchscreen.

These new alerts will now warn drivers of cross traffic as they back out of a parking space with little to no visibility of what is coming. It is a great new addition that will only increase the safety of the vehicles, while also utilizing something that is already installed in these specific Model 3 and Model Y units.

Advertisement

The Model 3 and Model Y were the central focus of the Spring 2026 Update, especially considering the fact that the Model S and Model X are basically gone, with only a few hundred units left. Additionally, Tesla included new Immersive Sound and Car Visualization for the Model 3 and Model Y specifically in this new update.

Continue Reading

News

Tesla parked 50+ Cybercabs outside its Texas Factory with some crash tested

Dozens of Tesla Cybercabs have been spotted at Giga Texas crash testing facility ahead of launch.

Published

on

By

Tesla Cybercab fleet spotted at Gigafactory Texas [Credit: Joe Tegtmeyer)
Tesla Cybercab fleet spotted at Gigafactory Texas on April 13, 2026 [Credit: Joe Tegtmeyer)

Drone footage captured by longtime Giga Texas observer Joe Tegtmeyer shows over 50 units of Tesla Cybercab at the Austin factory campus, including several units clustered by Tesla’s on-site crash testing facility.

The outbound lot at Gigafactory Texas sits just outside the factory exit and serves as the primary staging area where finished vehicles are held before being loaded onto transport carriers or dispatched for validation testing. On any given day, the lot holds a mix of Model Y and Cybertruck units alongside the growing Tesla Cybercab fleet, as can be seen in the drone footage captured by Joe Tegtmeyer.

Tesla Cybercab fleet spotted at Gigafactory Texas [Credit: Joe Tegtmeyer)

Tesla Cybercab fleet spotted at Gigafactory Texas on April 13, 2026 [Credit: Joe Tegtmeyer)

Roughly 50 Cybercab units are visible across the campus, parked in tight organized rows. Most of the units visible still carry steering wheels and pedals, temporary additions Tesla included to satisfy current safety regulations while the vehicles accumulate real-world data ahead of full regulatory approval for a steering wheel-free design.

Tesla Cybercab fleet spotted at Gigafactory Texas [Credit: Joe Tegtmeyer)

Tesla Cybercab fleet spotted at Gigafactory Texas [Credit: Joe Tegtmeyer)

Tesla operates dedicated Crash Labs at both its Giga Texas and Fremont facilities that are purpose-built for controlled structural crash tests. Historically, automakers begin intensive crash testing roughly one to two months before volume production kicks off. The Cybertruck followed almost exactly that pattern. The Cybercab appears to be on the same track facility that we first saw back in October 2025.

Tesla Cybercab crash test units spotted at Gigafactory Texas [Credit: Joe Tegtmeyer)

Tesla Cybercab crash test units spotted at Gigafactory Texas [Credit: Joe Tegtmeyer)

The first production Cybercab rolled off the Giga Texas line on February 17, 2026. Volume production is now targeted for April. Musk previously wrote on X that “the early production rate will be agonizingly slow, but eventually end up being insanely fast,” and separately stated Tesla is targeting at least 2 million Cybercab units per year. Commercial robotaxi service in Austin is targeted for late 2026.

 

Advertisement
Continue Reading