Update As Of 7/18/2014
The Cato Institute just published a paper titled “Tesla and The Car dealers’ lobby” with more background on the government protected car dealerships.
Tesla Is A Contradiction In Terms
Recently, the Wall Street Journal has described in detail that Tesla Motors primarily profits from government subsidies and selling government mandated zero emission credits. I blogged about this here.
A few days ago, the Wall Street Journal reported on 6/18/2013 titled “Tesla Clashes With Car Dealers/Electric-Vehicle Maker Wants to Sell Directly to Consumers; Critics Say Plan Violates Franchise Laws” (Subscription required) that the owner of Tesla Motors, i.e. Mr. Elon Musk, is having a hard time to sell electric cars directly to customers, because local car dealerships are a government protected racket.
The Government Car Dealership Racket
In another previous blog post I raised the issue why it is not possible in the US to buy cars over the Internet from anywhere in the world.
It is quite remarkable how in the so called freest country on earth it is possible that local businesses like car dealerships in collusion with state legislators have for decades suppressed competition through among other things franchise laws. Thus, it appears that US car manufacturers are not allowed to sell directly to customers, but only through franchised dealers.
To quote from the above mentioned article: “These franchise laws have insulated car dealers from much of the e-commerce revolution that has hammered other sectors from books to electronics.”
Now, Mr. Musk is up against a formidable opposition by car dealerships and state lawmakers (including Republicans) in different states where he is trying to sell online or via his own stores.
Kudos And Best Of Luck!
I wish Mr. Elon Musk best of luck and lot’s of success to crack wide open this incredible example of cronysm in the United States of America. Hope, Americans will wake up!
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