Texas, Oklahoma and Nevada make changes to lure business amid Delaware's ‘Dexit' concern
Lawmakers in Texas, Oklahoma and Nevada have recently approved changes aimed at helping their states dip into the lucrative side of corporate litigation that Delaware, with a specialized court and business-friendly laws, has dominated as the world's incorporation capital.
Concerned that these changes may lure corporations away from Delaware, thereby causing the small state to lose millions in corporate franchise taxes, Delaware officials have responded with their own changes to solidify their status in the business world.
In Texas, which opened a business court last year, there was bipartisan support for legislation diminishing shareholder powers and giving businesses more legal protections against shareholder lawsuits. Nevada lawmakers approved a corporation-friendly update to its business laws, also with bipartisan support, and separately moved toward asking voters to consider changing the state constitution to create a dedicated business court with appointed judges.
Billionaire Elon Musk had advocated both states as better options for incorporation after a Delaware judge struck down his shareholder-approved $56 billion compensation package from Tesla. Musk's businesses have also changed where they're incorporated: Tesla and SpaceX relocated to Texas, while Neuralink moved to Nevada.
Oklahoma also took action to get in the mix, as the Republican-led Legislature sanctioned the creation of business courts in its two most populous counties, a move the governor said would help Oklahoma become the most business-friendly state.
'This is an area in which states, in many ways, are behaving like businesses,' said Robert Ahdieh, dean of the Texas A&M University School of Law. 'Delaware is selling something. Texas is selling something that they hold out to be better. So it is very much a comparative exercise.'
Concerns about a 'Dexit'
Since 2024, several billion-dollar companies including TripAdvisor and DropBox have relocated to Nevada. More than a dozen others, including the AMC theater chain and video game developer Roblox Corporation, have announced plans to incorporate there this year. Latin American e-commerce giant MercadoLibre filed a request for shareholders to approve a Texas relocation in April, citing Delaware's 'less predictable' decision-making process — a common thought among exiting companies.
Amid concerns about more companies reincorporating elsewhere in a so-called 'Dexit,' Delaware passed its own legislation to help protect its status as the corporate capital, limiting shareholders' access to records and increasing protections for leadership. Opposition dubbed it 'the Billionaire's Bill.'
'Ultimately, I think the damage is done because businesses successfully undermined shareholder rights in Delaware,' said Corey Frayer, director of investor protection at Consumer Federation of America, who argues that the Delaware bill was a rash acquiescence to 'Dexit' concerns.
However, some business law experts, like Ahdieh, say the average shareholder is focused on increasing their returns and does not care about shareholder power or where the company is incorporated.
Delaware Gov. Matt Meyer has vowed to win back companies that leave, arguing his state's experience 'beats going to Vegas and rolling the dice.'
Less predictability
Companies flock to Delaware for its well-respected Court of Chancery, a sophisticated and separate forum focusing on equity, corporate and business law. This incorporation machine generates $2.2 billion annually, about one-third of the state's operating budget.
There is comfort in working in the familiarity of Delaware law, said Ahdieh, but that predictability has come into question in the last decade as corporate leaders grew unhappy over losing precedent-setting court decisions governing corporate conflicts of interest.
Widener University Commonwealth law school professor Christian Johnson acknowledged a shift in Delaware but said reincorporating elsewhere might be 'a bit of an overreaction.' Although a few big-name companies have moved, there are still more than 2 million legal entities incorporated in Delaware, including two-thirds of the Fortune 500.
Statutes in Texas and Nevada may appear more flexible, but they have not been extensively tested, and their courts are not as experienced working with the larger entities that favor Delaware, Johnson said.
Protections in Texas
In May, Texas Gov. Greg Abbott signed legislation providing greater securities for corporate officers and adding restrictions to shareholder records requests. The bill also allows corporations to require an ownership threshold, no more than 3% in outstanding shares, before a shareholder can initiate a derivative lawsuit, typically on behalf of the company and against its own board or directors.
Restrictions on who can initiate such lawsuits are not uncommon, but Texas' implementation imposes a 'far higher barrier than the norm,' Ahdieh said.
Consumer advocates worry the changes endanger shareholder and investor protections by giving owners and directors more protection against lawsuits that could hold them accountable if they violate their fiduciary duty.
For businesses, the changes mean potentially saving millions of dollars in shareholder lawsuit settlements and legal fees by mitigating the likelihood of those costly cases reaching court. For the states, attracting the companies means millions in business activity and revenue from regulatory filing and court case fees and taxes.
New courts
Eyeing a piece of that, Oklahoma is on pace to establish its recently approved business courts in 2026.
'I'm trying to take down Delaware," said Oklahoma Gov. Kevin Stitt, a Republican. "We want to be the most business-friendly state.'
Nevada wants to compete, too. It has run business dockets in Washoe and Clark counties since 2001, and it's in the state's interest to expand operations considering its fast-growing economy and population, said Benjamin Edwards, a University of Nevada, Las Vegas law professor who studies business and securities law.
But he said it could take decades to build up a court comparable to Delaware, which has a valuable reputation for handling cases relatively quickly.
Nevada's proposed business court wouldn't take effect until 2028 at the earliest and would require amending the state constitution, which would need approval by the 2027 legislature and voter approval in 2028 to allow for the appointment of judges.
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Reuters
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Daily Mail
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- Daily Mail
EXCLUSIVE Electric cars that crash in value in a year: Some are worth just a THIRD of their new price after 12 months
Some electric cars are worth as little as a third of their initial price - the equivalent of shedding £26,000 - after just 12 months, with This is Money revealing the 20 models with the most appalling residual values. EVs in general have suffered catastrophic depreciation since the end of 2022 when a cocktail of issues sent used prices into a downward spiral. This perfect storm hit almost simultaneously, involving a cost-of-living crisis, rocketing energy prices, hard-hitting media coverage of EVs, an oversupply of vehicles entering the second-hand market, and Tesla slashing new model prices. It quickly brewed into a destructive tornado for used electric car values. Three years later, this punishing depreciation is still hitting EV values - and to the tune of tens of thousands of pounds for owners who bought them outright, according to data shared with This is Money and MailOnline. Cap hpi - experts in the field of vehicle pricing - provided us with market information showing troubling EV residual values compared to cars of other fuel types, while also revealing the models that hemorrhage the most money after only 12 months. To understand what's stalling a recovery for second-hand EV prices, we also spoke to industry insiders to get their perspective on the crippling impact for the motor sector. How much faster are EVs depreciating? To understand just how rapidly EVs are leaking value, cap hpi provided data across all fuel types comparing their average new price and what a year-old model with 10,000 miles on the clock is worth. The average EV loses 43.2 per cent of its initial price over this 12-month period. In monetary terms, it means the resale value of a year-old EV is typically £25,900 less than the recommended retail price the owner paid. How does that compare to other fuel types? Hybrids are holding their value best, losing only 30.4 per cent (around £12,500) of their RRP in the first year. New diesels - which are incredibly rare now that car makers have slashed their availability on emissions grounds - are also holding value far more strongly than EVs, shedding 31.1 per cent (or just under £17,500) of their original cost. Buyers of petrol cars can expect to see 31.5 per cent of the retail price wiped from their motor's value after the first 12 months, which is the equivalent of £18,000. And it's plug-in hybrids that are depreciating at a rate closest to EVs, ditching 36.3 per cent of their value, which is a typical loss against the RRP of nearly £29,000 after one year. Which EV models shed most value in 12 months? Below is the countdown of the 20 electric cars that lose the most value in the first year, with a detailed look at the top 10 biggest fallers. When we asked cap hpi what makes these particular models shed value quicker than others, it said one of the biggest factors is that they were available in 'high volumes' during the period when EV values initially started barrel-rolling - around late 2022 and early 2023. Another contributor to their poor residual value is that many were launched with both a small and larger battery option, with the former much cheaper but far less appealing to used buyers. 'The smaller battery option looks inferior to rivals in term of range and charging capability, and these were often superseded by slightly larger, more efficient batteries,' Dylan Setterfield, head of forecast strategy at cap hpi, tells us. This combination of factors is why the 20 EVs listed below shed between 53 per cent and almost 67 per cent of their value in 12 months. FASTEST DEPREICATING YEAR-OLD ELECTRIC CARS (Number 20 to 11) Model Price new Value after a year Value lost Depreciation (%) 20. Peugeot e-Traveller (2020-) £53,876 £25,112 -£28,764 -53.4% 19. MG ZS EV (2019-2024) £32,941 £15,287 -£17,654 -53.6% 18. Fiat e500C (2020-) £35,140 £16,233 -£18,907 -53.8% 17. Citroen e-C4 X (2022-) £33,721 £15,306 -£18,415 -54.1% 16. Subaru Solterra (2022-) £53,940 £24,775 -£29,165 -54.1% 15. Honda e:Ny1 (2023-) £46,040 £20,100 -£25,940 -56.3% 14. Vauxhall Combo e-Life (2021-) £34,022 £14,800 -£19,222 -56.5% 13. Honda e (2020-2023) £37,340 £16,150 -£21,190 -56.7% 12. Fiat 500e (2020-) £31,107 £13,175 -£17,932 -57.7% 11. Citroen e-C4 (2020-) £32,890 £13,661 -£19,229 -57.8% Source: cap hpi 10. Peugeot e-2008 (2020-) - depreciates 58.3% Peugeot's e-2008 is a sound compact EV offering up to 250 miles of range on a single charge. But depreciation in the first year is rapid, at a staggering 58.3% Peugeot's small crossover model takes a huge financial hit in the first 12 months, losing 58.3 per cent of its value, which is the equivalent to £22,380. That's a big loss on a model that customers on average pay over £38,000 for. It was originally launched in 2020 with a 50kWh battery offering a range of 192 miles. An update since has upped this smaller battery range to 201 miles, while a 54kWh battery option provides up to 250 miles between charges. 9. Peugeot e-208 (2019-) - depreciates 59.4% Peugeot's smaller EV option, the e-208, fares even worse than the e-2008. Owners of new models see 59.4% of its value slip away over the first year The Peugeot e-2008's smaller sibling fares even worse than the crossover, with the e-208 French supermini shedding 59.4 per cent of its RRP after a year on the road with average mileage. With an average residual loss of £20,000, the depreciation in the first 12 months is more than the price of a new petrol engined 208 (£19,995). When it debuted in 2019, its lone 50kWh battery option provided up to 211 miles of range. This has been increased and a bigger 54kWh pack available now extends the distance between charges to 268 miles. 8. MG 5 EV (2020-) - depreciates 59.7% The MG5 EV is one of the cheapest new electric family cars - and one of few affordable estate EVs. Yet it loses 59.7% of its new price within 12 months on the road In terms of practical electric family cars, there are few models as capable - and affordable - as the MG 5 EV. Sold exclusively as an estate, it has bounds of passenger and luggage space. But that doesn't prevent a first-year collapse in value, with customers typically paying £32,191 for a new one, which is then worth just £12,975 12 months later. That's over £19,000 lost, which is effectively giving away more than £1,500 a month on what is already a budget-end electric family car. When it launched it came with a 52kWh battery supplying a range of 214 miles. A major facelift and overhaul in 2023 means customers can get their hands on one with almost 300 miles of range. 7. Vauxhall Corsa-e (2020-) - depreciates 61.6% Vauxhall will be hoping the recent arrival of a facelifted version of its Corsa and Corsa Electric will help spare the EV variant's poor residual values Given the Peugeot e-208's appearance already in this list, it's somewhat unsurprising to find its sister model from Vauxhall also making the order, though with a more significant one-year value decline of 61.6 per cent. Vauxhall will hope its recent facelift - and a Long Range spec offering 266 miles of range between changes - will give it a boost, but for now cap hpi shows it shifting £20,500 of its original £33,330 average new price after 12 months. That means owners who buy a Corsa-e outright can expect it to be worth just £12,700 when it turns a year old. In comparison, a year-old petrol Corsa, which was cheaper to buy new by depreciates far slower, is on average £3,600 more expensive. 6. Vauxhall Vivaro e-Life (2020-) - depreciates 61.7% The Vivaro e-Life is Vauxhall's large MPV that seats up to nine people. It's not cheap to buy new, costing on average just under £50k. After a year, these are typically worth just £19k The Vivaro e-Life is Vauxhall's answer to a large MPV with coach-like passenger capacity of up to nine seats. With a claimed range of just 141 miles, it's relatively limited in terms of driving distances on a single charge. This might be one of the factors impacting its poor residual value performance. It loses 61.7 per cent of the new price in 12 months, leaving owners of a near-£50k battery-powered MPV with an asset worth only £19,000 after one year. 5. Vauxhall Mokka-e (2020-) - depreciates 62.4% The third Vauxhall in this list - and one of six Stellantis models in the top ten - is the Mokka-e, which sheds 62.4% of its new value after one year Completing a hat-trick of electric Vauxhall's in this list is the Mokka-e - the compact crossover version of the Corsa, and the sister car to the Peugeot e-2008 (in tenth in this list). Offering up to 252 miles of range today, it originally launched in 2020 with a smaller battery providing as little as 197 miles between charges. With customers typically paying £37,000 for a new example, after 12 months it will have lost over £23,000 in value - that's depreciation of 62.4 per cent. This makes a year-old Mokka-e £4,500 cheaper than a Mokka petrol after the same amount of time and mileage. 4. Nissan Leaf (2017-2024) - depreciates 64.8% A new third-generation Nissan Leaf arrives next year, replacing this rather dated model that launched in 2017. Value retention for new models has been poor, losing 64.8% of its new price within the first 12 months of being registered This month, This is Money had an exclusive first look at the new third-generation Nissan Leaf, which is due to be delivered to customers in spring 2026. To prepare for its arrival, production of the previous-gen car ceased last year, and it is this ageing EV that's covered here. When it debuted in 2017, it could go no further than 168 miles between charges. However, upgrades over the year - including the 2019 arrival of the Leaf+ - upped the range to 239 miles. Given it is incredibly long in the tooth by relative electric vehicle standards today, it's not at all surprising to see the outgoing Leaf ranked fourth in this list for rapid depreciation. Though 12-month value loss of 64.8 per cent is still incredibly concerning. 3. Ora 03 (2023-) - depreciates 65.4% Ora is a Chinese newcomer. The brand is part of the Great Wall Motor conglomerate, which is a powerhouse in the EV market in East Asia. The 03 is its debut model for the UK with a compact size, oddball looks and even stranger launch name of 'Funky Cat'. Its limited range of 193 miles and steep pricing [by Chinese brands' standards] has made it less appealing to used buyers. Losing almost two thirds of its new price, owners can expect to see £21,900 disappear from its value in the first 12 months. 2. Mazda MX-30 (2020-) - depreciates 65.6% The Mazda MX-30 is the Japanese brand's first EV attempt. While a stylish and practical motor, it has a limited battery range of just 124 miles. This is likely contributing to weak values The MX-30 is Mazda's attempt to wade into the compact electric SUV market with a stylish retro design and suicide doors. But there is one limiting factor of this family-friendly Japanese EV that's almost certainly restricted its appeal to driver - and that's its range. At an official 124 miles, it far shorter than rivals and could be one of the main reasons why second-hand prices have been slashed to make them more appealing. It means a new one, typically costing £33,260, sheds £21,800 of that value in the first year. That's depreciation of 65.6 per cent in 12 months. 1. DS3 E-Tense (2019-) - depreciates 66.7% The fastest- depreciating electric car over 12 months is the DS3 E-Tense. While this small crossover offers up to 248 miles of range, it also loses £26,000 in the first year on average Citroen's electric hatchback sold today has a range of up to 248 miles on a full charge - though when it launched in 2019 it could only go for 200 miles before a fresh dose of electricity. Despite its relatively practical performance for such a compact car, residual values are exceptionally weak. For a new model costing on average almost £39,000, owners after one year have an automotive asset valued at less than a new Dacia Sandero (Britain's cheapest car), having lost almost £25,900 over the course of 12 months. Depreciation of 66.7 per cent makes this the fastest price faller of all models. PETROL CAR COMPARISON Ford Puma (2019-) - depreciates 27.6% Value after year: £21,167 Depreciation: -£7,985 For comparison purposes, we asked cap hpi to run the value retention figures on a Ford Puma petrol - Britain's best-selling new car for the last two consecutive years. While the EVs listed above all lose between 53.4 and 66.7 per cent of their average original price after the first 12 months, the Puma sheds just 27.6 per cent of its RRP in the initial year of ownership. In monetary terms, that's a loss of just £7,985 - a fraction of the depreciation that hammers the value of the electric cars listed. Why are EVs ravaged by hefty depreciation? As EV values continue to drop like a stone in the first year, we've examined what's having such a significant detrimental impact on used prices. One of the biggest factors is the level of discounting of new electric cars. With manufacturers under intense pressure to meet the Government's Zero Emission Vehicle (ZEV) mandate - the annually-increasing EV sales targets set out for the next decade - they have been slashing the price of models to make them more attractive to buyers. The Society of Motor Manufacturers and Trader (SMMT) claims car makers swallowed £4billion in losses associated to discounted EV pricing last year - and are on course to lose billions again this year as ZEV targets increase for 2025. Cap's forecast expert Dylan Setterfield says 'nearly new' [up to 12 months old] second-hand prices are also being compounded by other deals offered with new EVs to increase their appeal. He told This is Money: 'When a substantial financial discount on the new car is combined with 0 per cent finance and other elements such as free wall box charging units, complimentary servicing costs, and a large amount of free electric charging through a partner supplier, a new EV often ends up being cheaper than a nearly new used car, with the inevitable effect on used values. 'Although there are some exceptions, these incentives are not typically applied to used cars. 'Even after these new car offers are removed, the used values are unlikely to recover from their reduced level as the market has already been set.' Former Top Gear host turned EV campaigner Quentin Willson has blamed catastrophic electric car depreciation on over supply into the second-hand market from ex-fleet models and 'drivers not understanding EV technology' Quentin Willson, the former Top Gear host turned EV campaigner for the FairCharge group, said discounted new electric car prices are just part of a wider issue. 'Over supply of EVs from fleets into the used market, and mainstream drivers not understanding technology, have also combined to cause heavier than expected depreciation,' he told us. James Buxton, chief exec at car360 - the UK's largest sole used EV dealer network in the UK selling around 5,000 electric models per year - also blamed significant depreciation on a 'market imbalance' being created by a flood of used EVs from lease operators. Earlier this year, the British Vehicle Rental and Leasing Association (BVRLA) warned that car finance and leasing companies are losing 'hundreds of millions' of pounds at the hands of the rapid depreciation of electric vehicles, the trade body has warned. In a letter penned to the Government's Transport Select Committee, it said the sector has been the driving force behind EV growth but is now being left to 'shoulder' massive losses resulting from plummeting residual values. Toby Poston, BVRLA's chief executive, told us: 'Month after month, used EV prices are continuing to fall. This is costing fleets and leasing companies millions upon millions of pounds, eroding confidence across the second-hand market, pushing up new electric vehicle prices and acting like a drag anchor on the whole zero emission vehicle transition. 'Things have become so volatile and costly that fleets are trying desperately to avoid putting their BEV stock into the used market – by leasing them again or extending existing leases. 'The number of used electric vehicles hitting the market is already outstripping demand, but we know that even that 'supply' figure is artificially low because companies are holding back from defleeting to avoid crystalising their depreciation losses.' Quentin Willson also believes misinformation surrounding battery life being a major contributor to second-hand EV demand shrinking and anchoring prices, with drivers believing degradation is far more severe than studies have shown. He pointed to research from Geotab published last year - based a review of 5,000 EVs - that suggested that a typical EV battery degrades by 1.8 per cent each year, and says this will slow as more advanced technology emerge. Experts believe misinformation about the lifecycle of EV batteries is a cause of substantial depreciation. A recent report suggested that batteries in current models degrade, on average, by around 1.8% annually James Buxton, boss at EV-only used car site car360, says Elon Musk's unpopularity impact on Tesla prices has also dragged the wider battery vehicle market down Another market impact is the slump in demand for Tesla cars as public opinion on CEO Elon Musk has taken a major detour. Buxton, who said cars360 sold a record 400 used EVs last month, told This is Money: 'Tesla's woes have dragged the rest of the market down because they're still the largest volume player in the used car space. But these lower priced Teslas are now getting stronger enquiries.' So, how do EV converts avoid such crippling deprecation. Steve Walker, head of digital content at Auto Express, tells us: 'We've seen EV technology evolve very quickly with longer ranges, shorter charge times and lower purchase prices for new cars all making used models bought years, or maybe only months, ago look less attractive. 'The trick from a consumer point of view is to seek out today's top EV models; cars using the latest technology with long-term desirability built in. 'Then use the dealers' burning need to sell and a bit of careful haggling to get yourself a great deal. 'That'll help mediate some of the huge depreciation, but future residual values will always depend to a great extent on where the car market rollercoaster goes next.'
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