In North Carolina, a senate committee has unanimously passed a law which would prevent Tesla, a manufacturer of high-end electric autos, from selling to any North Carolina resident. The bill still has to pass the full Senate and the House, but given that not one Senator on the committee voted against this protectionist nonsense, I’m not optimistic that this bill will be stopped.
The proposal cuts at the heart of Tesla’s business model: selling luxury cars over the phone or Internet and then delivering them to the front door of high-net-worth customers.[…]
It’s not Tesla per se, that worries the dealers. It’s the precedent. The prospect threatens the livelihood of North Carolina’s 7,000 licensed dealers, who invest millions in building big lots and showrooms to efficiently move product, say supporters of the bill.
But if they were really that efficient, then they wouldn’t have to be afraid of a new business model coming along.
Will Aremus at Slate points out that the sponsor of this law, GOP Senator Tom Apodaca, has taken $8000 (the legal maximum) from the car dealers association, and I suspect has taken thousands more from individual dealers and their friends and relatives.
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, “You tell me they’re gonna support the little leagues and the YMCA?”
If that’s the real issue, then I may have some good news for all concerned: I asked O’Connell, and he assured me Tesla would be happy to support the little leagues and the YMCA, if that’s what North Carolina requires in order to do business there. Problem solved! Right, Mr. Glaser?
If this law passes, North Carolina will be the first state to actually forbid its citizens from buying a Tesla, but not the first to pass an anti-Tesla law. In GOP-controlled Texas, employees of Tesla showrooms are legally forbidden from selling a car, offering a test drive, or even telling interested consumers how much one costs.
Is all this just because the GOP hates electric cars, not to mention fancy new colors that crayons didn’t come in when I was a kid, dagnammit? No, not entirely. Although it’s more hypocritical when the GOP does it (because they pretend to care so much about the free market), both parties engage in this anti-competitive nonsense, especially at a local level.
Some points about this:
1) It’s not just about high-end cars for rich people. New business models sometimes start by targeting wealthy consumers, for obvious reasons, but if they’re successful they can eventually become something benefiting small businesses and ordinary consumers. But not if existing businesses can bribe the legislature to outlaw competition and innovation.
2) Localism is nonsense. Local governments are, if anything, more liable to being bribed and captured by business interests than the national government is. (Ever wonder why it costs $40-$60 to hire a taxi or shuttle to get you home from the airport? Thank your local government.)
3) GOP legislators, although they talk a good game, aren’t actually that interested in protecting the free market or competition. (Neither are Democratic party legislators, to be fair.)
4) When I think of all the car dealerships in Portland – hundreds of them – and how many people they employ, I do understand the fear of a business model that cuts dealerships out. It is always easier to imagine what we now have, which could be lost, then to imagine what new thing will replace them. But this really does seem like an area where its best to let the marketplace sort itself out. I’m sure that it was painful for typewriter manufacturers and repair technicians when computers came along, but passing laws against innovation is not the solution.
5) I expect that a conservative may be tempted to respond “Democrats won’t let us buy whatever car we want either, just look at all the green regulations Democrats favor, naaah nah.” But it’s not the same. There is a legitimate theory of governance under which the market is limited by a democratically elected government in order to address concerns like protecting the environment, which happens to be the theory that most Democrats openly advocate, and tell voters they favor.
In contrast, there is no legitimate theory of government in which the government should outlaw innovative business models because local car dealerships have paid off legislators – nor is that a system that legislators ever openly advocate. It is only by lying to voters about how they intend to govern, that legislators can act this way.
(And again, this isn’t a GOP-only problem. Legislators of both parties supported this anti-market bill in North Carolina, and similar bills elsewhere.)
6) As the Slate article notes, this is far from the most ridiculous stance the North Carolina legislature has taken. Last year, they banned the use of science to predict how fast coastlines will rise. Unsurprisingly, the sponsor of this legislation – which I think it’s reasonable to describe as not only anti-science and anti-good-government, but at a very basic level anti-thought itself – is a climate change denier.