Is Tesla’s battery factory a bargaining chip in the dealer franchise fight?

Well, it’s begun. The lobbying to get Tesla to build its massive battery factory in one of four states being considered. All nine of Arizona’s U.S. Congresspeople wrote letters to Tesla on Tuesday. Other states like Texas are keen to remind Tesla that they’re non-union states with no corporate income taxes.

At the same time that the lobbying has begun, Tesla is aware that it’s got a dealer franchise fight on its hand. And let’s just say a factory that’ll bring 6500 jobs to a state is a bargaining chip.

From The Huffington Post:

Tesla’s response has been understandably cool.

“The issue of where we do business is in some ways inextricably linked to where we sell our cars,” Diarmuid O’Connell, Tesla’s vice president for business development, told Bloomberg earlier this month. “If Texas wants to reconsider its position on Tesla selling directly in Texas, it certainly couldn’t hurt.”

Policy makers in both states have been trying to appease Tesla, with little luck so far. Republican Governor Rick Perry supported a bill last year that would have let companies making 100-percent electric cars sell them directly to customers. That bill died in the Texas House of Representatives.

In 2012 the Texas Auto Dealers group spent $2.5 million lobbying. And Tesla will be up against similar forces in other states. In many ways, it puts Tesla in a tough position because if it attempts to use the factory as a bargaining chip, three of the four states will remain disappointed because they won’t be getting a massive battery factory. And they will be even less likely to help Tesla work around state dealer franchising laws.

But if you’re Tesla and you’ve got one bargaining chip to play, I suspect you might want to do it in Texas, the second most populous state and the state likely to buy the most Tesla vehicles, assuming other incentives like tax breaks are somewhat equal. Now to convincing that state legislature to exempt EVs from dealer franchise laws.