The Wrongologist

What’s Wrong Today:

Apparently, electric cars are totally
unfair to auto dealers. Of course, we know that sites like Intelligent Car Leasing are, along with many others, beginning to make further steps in the electric car field, but apparently this is rather dangerous for those that make their living from selling cars. So much so that North Carolina Republicans are
pulling the plug on Silicon Valley darling Tesla Motors.  Slate’s Will
Oremus reports:

It’s just a simple little bill that would prohibit automakers from direct sales of their cars in North
Carolina.

Tesla
Model S

It’s easy
to understand why some car dealers might feel a threatened: Tesla’s Model S outsold the Mercedes S-Class, BMW 7 Series, and
Audi A8 last quarter without using dealers.  If this business model were to catch on,
consumers might find that they don’t need the middle-men at all.

And North
Carolina isn’t the only state trying to eliminate Tesla’s “unfair” competition.
In Texas, the company is fighting a law under which the employees of its
“showroom” in Austin are not allowed to sell any vehicles, offer test drives, or even
tell customers how much the car costs.

But Texas allows
sales of the car online, which North Carolina’s law would prohibit.

Slate
reports that Tesla has already sold 80 cars in North Carolina, mostly through
the Web, and has about 60 more orders in the works. It also has plans to build
its first showroom in the state next year. The Raleigh-Durham Research Triangle
in particular appears to be a hotbed of Tesla interest, which makes sense given
its similarities to Silicon Valley. They’re probably
also doing well in liberal Asheville. 

The real issue is, by taking dealers out of the sale, Tesla’s
business model is a direct threat to the dealerships in the state, and
they want Tesla gone.


The bill is supported by the North
Carolina Automobile Dealers Association, a trade group representing the
state’s franchised dealerships. Its sponsor, state Sen. Tom Apodaca, (R-
Henderson), has said the goal is to prevent unfair competition between
manufacturers and dealers.

What makes
what Tesla is doing “unfair competition” as opposed to plain-old
“competition”—something Republicans typically favor—is not
entirely clear.

Tesla rejects
the idea that prohibiting direct to consumer sales will protect consumers, as the North Carolina Automobile Dealers’ Association claims. The
franchise-dealer model might work fine for giant automakers, but since Tesla’s
products represent a challenge to the traditional products the auto industry relies
upon, it wouldn’t work for Tesla.

How do you sell the future when your business depends
on today?

Robert
Glaser, president of the Dealers Association, told the News & Observer that
the law prohibiting Tesla sales isn’t just about his industry’s self-interest.
Pointing to the Tesla representatives at a recent hearing, he said:

All this is
from the state that brought you the nation’s first ban on climate science.  So, it would make sense that NC Republicans also
hate electric cars. 

Free
markets aren’t free, that’s for suckers. 

Crony
Capitalism: So much nicer to rig the game.