Tesla cannot sell cars in Texas the way it sells them in most other states. Texas Occupations Code Section 2301.476 bars any manufacturer or distributor from owning, operating, or acting as a dealership, and Tesla has no franchised dealers in the state.1State of Texas. Texas Occupations Code 2301.476 – Manufacturer or Distributor Ownership, Operation, or Control of Dealership You can still buy one. The purchase happens online through an out-of-state Tesla entity, the car is delivered to you in Texas, and you handle the title and registration paperwork yourself.
Why Direct Sales Are Blocked
Chapter 2301 of the Texas Occupations Code governs how new vehicles reach consumers in Texas, and Section 2301.476 makes it illegal for a manufacturer to directly or indirectly own, operate, or control a dealership.1State of Texas. Texas Occupations Code 2301.476 – Manufacturer or Distributor Ownership, Operation, or Control of Dealership The Texas Department of Motor Vehicles states that only franchised dealers licensed for a specific vehicle line may sell new motor vehicles to Texas consumers, including municipalities.2Texas Department of Motor Vehicles. Distributor License The ban is not aimed at Tesla specifically. Rivian and Lucid face the same restriction, and Texas is one of roughly 17 states with an outright prohibition on direct manufacturer sales.
What Tesla Galleries in Texas Can and Can’t Do
Tesla operates showroom-style locations in Texas called galleries. You can walk around the vehicles, sit inside them, and ask staff about features and technology. Staff cannot discuss pricing, quote financing, take an order, or direct you to the Tesla website to place one. Test drives are not offered either. The galleries are informational spaces, not retail stores. If you visit expecting to leave with a purchase agreement, you will leave empty-handed.
How to Actually Buy a Tesla in Texas
You place the order through Tesla’s website. The purchase contract is finalized with an out-of-state Tesla entity, typically in California, so the sale legally occurs in a state that allows direct manufacturer transactions. Because the sale happens outside Texas, it does not violate the state’s franchise law.
You configure the vehicle, arrange financing or pay in full, and wait for delivery. Tesla ships the car to a delivery center in Texas, where you take possession of a vehicle you have already bought. The legal mechanism is the same one anyone uses to buy a car from a private seller in another state and bring it home; Tesla has simply made it a streamlined online process.
The practical catch is paperwork. At a traditional dealership, the finance office handles your title, registration, and tax payment. With a Tesla purchase, that work falls on you.
Taxes, Fees, and Registration
Because the transaction counts as an out-of-state purchase, you title and register the vehicle yourself at your local county tax assessor-collector’s office.3Texas Department of Motor Vehicles. Out of State and Imported Vehicles Bring the Manufacturer’s Certificate of Origin, proof of insurance, and your purchase documentation. You will pay the following:
- Motor vehicle sales and use tax of 6.25% of the purchase price, minus any trade-in allowance, remitted with Form 130-U.4Texas Comptroller of Public Accounts. Motor Vehicle – Sales and Use Tax
- An electric vehicle surcharge of $400 at initial registration, then $200 at each annual renewal, which Texas adopted to offset lost gasoline tax revenue.
- Title and base registration fees, generally $75 to $100 depending on the county.
- An inspection replacement fee of $16.75 for new vehicles, still collected at registration even though Texas ended mandatory safety inspections for non-commercial vehicles on January 1, 2025.5Texas Department of Motor Vehicles. Register Your Vehicle
On a $50,000 Tesla, the sales tax alone is $3,125, and the EV surcharge adds another $400. Budget roughly $3,600 to $3,700 in taxes and fees on top of the purchase price. A dealership would normally collect and remit this for you. Here, it’s a trip to the county office.
No Federal EV Tax Credit in 2026
If you are buying in 2026, do not count on the federal clean vehicle tax credit. The New Clean Vehicle Credit under Section 30D of the Internal Revenue Code is not available for vehicles acquired after September 30, 2025.6Internal Revenue Service. Clean Vehicle Tax Credits The previously owned clean vehicle credit and the commercial clean vehicle credit expired on the same date, and as of early 2026 no replacement federal purchase credit has been enacted. Texas does not offer a state-level EV purchase incentive, so the sticker price is essentially the final price before taxes and fees.
Service and Warranty in Texas
The franchise law restricts how Tesla sells cars, not how it services them. Tesla operates service centers across Texas for repairs, warranty work, and software updates, and the company also sends mobile technicians who can complete many repairs at your home or office. You schedule both through the Tesla app.7Tesla. Service
Warranty coverage comes in two tiers. The Basic Vehicle Limited Warranty runs four years or 50,000 miles, whichever comes first, and covers most components and defects. The Battery and Drive Unit Warranty runs eight years, with mileage limits that vary by model: 100,000 miles on the Model 3 Standard and Model Y Standard, 120,000 miles on Long Range and Performance versions, and 150,000 miles on the Model S, Model X, and Cybertruck. All battery warranties guarantee at least 70% capacity retention over the coverage period.
Will the Law Change?
Several bills have been introduced in the Texas Legislature to carve out an exception for manufacturers that sell only electric vehicles and have never used the franchise system. None have passed. The Legislature meets in regular session only every two years, in odd-numbered years, and prior bills failed to leave committee before the 140-day session ended. Until the Legislature creates an exception or federal action preempts state law, Tesla buyers in Texas will keep ordering online and handling their own paperwork at the county tax office.