Tesla, which manufactures some of the most popular electric vehicles in the world, is opening a store in Gilroy.
Located at 500 Automall Drive, the store will be Tesla’s first in South County. The building has sat vacant since early 2020, when South County Chrysler Dodge Jeep RAM closed following the beginning of the county’s Covid-19 shelter-in-place order.
When the store will open is unknown, as Tesla officials had not responded to a request for comment as of press time. A call to the phone number listed for the Gilroy store, which was posted on the Tesla website Monday, had an automated message, stating it was currently a “non-working number at Tesla.”
Gilroy was one of the early adopters for the Palo Alto-based company’s vehicle superchargers. A supercharger at the Gilroy Premium Outlets was one of the first such stations in the country when it was built in 2012.
Since then, superchargers have been built at the Gilroy Crossing shopping center, as well as at the Coyote Creek Golf Club and Target in Morgan Hill.
Superchargers can give the battery-powered luxury cars up to 200 miles of range in 15 minutes, according to Tesla.
The addition of Tesla is expected to provide another boost to the Gilroy Auto Mall that is pulling itself out of a rough 2020.
Gill Auto Group took over operations of the former South County Chrysler Dodge Jeep RAM at 455 Automall Drive in December, renaming it Gilroy Chrysler Dodge Jeep RAM. Around the same time, Hyundai of Gilroy opened at 6700 Automall Parkway, after the closure of South County Hyundai.
Nissan of Gilroy, meanwhile, opened in its newly constructed location at 6807 Automall Parkway in January, moving from its former spot at 400 Automall Drive.
Such development is what city officials are hoping to spur after the Gilroy City Council approved an incentive program April 5 to attract new dealerships and encourage existing ones to expand.
The city relies heavily on vehicle sales tax to fund services such as public safety and parks maintenance. Gilroy financial reports list five dealerships among the 25 highest sales tax-generators in the city, and City Administrator Jimmy Forbis said dealerships account for roughly a quarter of the city’s overall sales tax revenue.
Forbis added that over the past five years, dealership sales tax revenue grew around 10 percent annually over the past five years, although it took a dip in 2020 due to Covid-19 closures.
According to the new policy, dealerships looking to locate in Gilroy or existing stores looking to expand can enter into an agreement with the city, where the business would receive a rebate of a portion of generated sales tax.
Community Development Director Karen Garner said each agreement would come to the council for consideration.
“Even if dealerships never participate in the program, the goodwill generated by offering such a program goes a long way in retaining these important businesses and can help prevent them from going to competitor cities,” she said.
Tesla, however, would not qualify for the program, as it will not be directly selling vehicles onsite, Forbis said. Tesla stores differ from other dealerships, as they are primarily showrooms and places to purchase accessories, with vehicle sales occurring online.
“I believe that Gilroy being in the South County and foot traffic through our existing auto mall were the driving factors for Tesla opening in Gilroy,” Forbis said.
