Friday, September 13, 2013


Tesla Motors is local to the Seattle area. As a result I suspect it's a bit more common to see them running around here than it may other places (my company's CIO drives one). Hell, you can buy them at the mall at the Tesla's near equivalent of the Apple store here in washington. The magazine reviews have been surprisingly exceptional. They are also relatively striking looking cars, my 8 year old car snob of a son made me cross the street the other day so he could better scrutinize one. By the way, this is the same kid that shouts "You suck!" at every Prius he sees so it's probably not the novelty of being electric that appeals to him. The 0-60 might though. If I hit the lottery tomorrow a Tesla won't be the first car I run out to buy but I "get" why people like them.

So given all that I was pretty shocked to see a headline stating car dealership lobbyists had successfully prohibited the sale of Tesla cars in Texas:

Tesla doesn’t use car dealerships.  They sell directly to the consumer. No haggling, no upselling, no commission for employees, and uniform prices at every store.  You just point to the car, say “I want that,” and you buy it. It makes a lot of sense for Tesla.  Customers don’t like car dealers, and car dealers don’t like electric cars, so why would you try to sell an electric car to a customer through a car dealership?  It is capitalism – a producer of a good is responding to the incentives of the market.
But the car dealerships feared, perhaps correctly, that if Tesla Motors could sell cars directly to consumers, there would be no way to stop other car companies from selling directly to consumers.  And they got their way because they bought the laws they wanted, laws which prop up their outdated business model at the expense of Texas consumers and innovative entrepreneurs.
So because Tesla doesn’t go through a completely unnecessary middleman who turns the pleasant experience of buying a car into something resembling haggling for a donkey in Marrakesh, they can’t sell their cars in Texas.

This begs the question: Isn’t this the exact opposite of what Republicans say they’re going to do when they talk about “preserving free markets” and “ending burdensome regulations”? 

With a Republican-controlled legislature, a Republican executive, and many conservatives in our judiciary, why the hell don't we have free markets in Texas? Isn't it the very core of economic-conservative theory that the invisible hand of the free market determines who gets what resources? Doesn't the free market have the ability to direct resources to where they can most efficiently be used? 

 From the intended gearhead perspective of this particular blog post I'm perfectly willing sidestep the political argument all together for now.

I realize it's not really an apples-to-apples comparison but I couldn't help but think of how Tucker Car Corporation was absolutely flattened by the Big Three automakers. Pretty lame.

Years ago, just prior to the explosion mp3 downloads record companies had a great opportunity to see that their business model was dying and embrace a new one. Instead they just tried to mobster bully everyone involved. When was the last time you bought CD in a store? Things could played out quite differently.

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