Tesla is winning.
The famed American luxury electric car start-up has been battling entrenched auto dealership interests over whether it should be permitted to sell its cars directly to consumers, instead of going through the long-established and much-bemoaned independent dealership system. Well last week, it scored a major victory in its fight against the rent-seeking dealers, as a North Carolina House committee removed language from a bill that would have prevented Tesla from selling to North Carolinians.
The corresponding Senate committee had previously passed the language unanimously, leading to concerns that the local political clout of auto dealer interests would strangle Tesla in its infancy, as the low-volume start-up has little to gain from trying to get gas-powered dealers to sell its competing technology. However, after a brilliant couple months of news for Tesla, including a near-perfect score from Consumer Reports, and after the speaker of the House and Governor McCrory were taken for spins in the new Model S, the restrictions are dead for good.
Coming on the heels of that victory, a pro-Tesla WhiteHouse.gov petition recently crossed the 100,000 signature threshold to compel a White House response. As Will Oremus notes, ”Tesla critics like to point out that the Tesla Model S’s $70,000-plus price tag puts the car out of reach for the average American. But the success of the White House petition makes clear that it isn’t just wealthy Model S owners who are rooting for the company.”
That criticism was always ill-founded, because Tesla Motors has always been more than a luxury car company. It is a “halo” product for Silicon Valley, American manufacturing, the car industry alike, as well as an actual embodiment of many of the platitudes that politicians heap on American business. What is quite possibly the best car in the world is conceived, designed, and constructed in America. In that light, the green subsidies and discounted Department of Energy loans may well be justifiable not on free-market grounds, but as a national greatness project.
Tesla will probably like the response it ultimately receives from the White House. The most significant reason is that while auto-dealers have enormous political clout in this country, very little of it is operationalized at the federal level. As the AP noted in a follow-up story, “Research into their lobbying efforts shows franchise dealers are extremely influential in large part because their businesses contribute greatly to the tax base of local and state governments.” The very locality of auto dealerships that empowers their rent-seeking on a state level, and comprises their significant contributions to civil society at a deeper level, prevents them from having quite the same clout in currying favor from the feds.
This is a development we should all be able to celebrate. For all the (legitimate, to my mind) hand-wringing that can be done over the future of civil society amid increasing direct sales, it is rare to have the chance to celebrate American manufacturing success or a failure of crony capitalism, much less on the same day.
We should cherish the opportunity, and tip our caps to Tesla.