The Biggest Problem Facing Tesla’s Pickup

There’s a huge problem facing Tesla’s pickup truck and it has nothing to do with the actual truck itself. No other truck maker has this problem because of the way they sell trucks. 

Tesla can’t sell its new pickup in some of the top states for half-ton pickup truck sales. That’s right, you can’t buy a pickup in many of the top states for half-ton pickup registrations. So, this means that even if the Tesla pickup is a hit, the problem is that its sales will be limited.

Tesla can’t sell pickups in Texas and Michigan

Tesla Charging
Tesla charging | Getty

Texas and Michigan are the top two states for registration of half-ton pickups according to IHS Markit. IHS is an independent industry tracking company. Oklahoma is also one of the top five states for half-ton pickup sales. These three states ban direct sales of vehicles to customers, so Tesla can’t sell anything in those states.

Other states also ban direct sales, which has been an ongoing problem. But, Texas, Michigan, and Oklahoma are three of the biggest truck states where Tesla can’t sell its products. The other two in the top five are California and Florida.

State-by-state franchise laws are hurting Tesla

These dealer franchise laws go way back to the early days of vehicle manufacturing. Car companies decided it would be better to only have to deal with manufacturing. Selling and fixing cars would be left to dealerships. After a time the dealers wanted protection and lobbied states they were located in. 

Tesla's Autopilot Technology
Tesla’s Autopilot Technology | Getty

Because each state handled franchise laws differ from state to state laws vary. That is why some states allow direct sales while others don’t. 

Roughly three times as many half-ton pickups are sold in Texas as in California. About 15% of all half-ton pickup registrations are in Texas. With the rise in gas and energy exploration and also renewables in both Texas and Oklahoma it is expected pickup sales will rise in both states. 

So, this is a huge stumbling block for Tesla’s ambition to take a bite of the lucrative pickup market. 

Pickup truck analysts are spinning Tesla’s doom differently

But, it’s interesting how analysts view the electric pickup truck market as a whole. IHS is saying that by 2026 both full and midsize pickups will sell roughly 75,000 units. Overall pickup truck sales are estimated to be over three million. By those numbers, electric pickups are a very small segment of the pickup truck market. 

Still, both the leader Ford and GM are not taking any chances. Though they say they know the truck market better than anything, they have lagged behind Tesla and even Rivian. Nonetheless, both are developing electric pickups, which could be out by the time the Tesla pickup is out. So, the leaders in the segment overall will have a place at the electrification table. That may make it harder for Tesla to take that big bite it sees as low hanging fruit.

The other electric truck manufacturer that may actually be the furthest along in development is Rivian. It plans on having its pickup for sale in 2020, which is not that far off. It may beat all of the manufacturers in getting an electric truck to market. If the Tesla pickup was available now, it would have a huge lead on the other trucks. But, it is estimated the pickup won’t be available until 2021 or 2022. 

Tonight we’ll get our first look at the F-150 fighter from Tesla. 

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