Saturday, October 25, 2014

Tesla: Is America Stopping the Future?

Just this week, Michigan has banned direct sales of Teslas in Michigan. This is because, in 2009, when President Obama decided to bail out GM (and in turn save Michigan's economy), former Governor Jennifer Granholm signed a bill that protected car dealerships from competition.

Now, you're probably wondering, "Why does this affect us? Why do we care?", and the reason is simply that direct sales of cars would drastically drive down the costs of the cars. An example, when you buy a car, you don't pay the company's MSRP. You pay something that you and the dealership decides on. After they finalize the price, the dealer takes the difference between the price you pay, and the factory price of the car. The reason they're able to do this is because there aren't any companies selling cars directly to consumers, like what Tesla is trying to do.

If companies could sell cars to consumers directly, they can cut out the dealers (middleman), and charge you what the car is actually worth. On top of this, when you bring your car into service, it won't be serviced by the dealer (like it is now), it'll be serviced by Tesla technicians and use Tesla factory parts. Sounds great right? So why hasn't this happened yet?

This hasn't happened yet because of the car dealers and the government. Car dealers see companies like Tesla as a threat, because they are scared other car dealers will see Tesla as an example and follow suit, in selling their cars directly. So to protect themselves, the car dealers lobby members of the government to pass legislature to protect them (as in the case of GM).

All this, in the end, is detrimental to consumers this lobbying by car dealerships prevents consumers from getting cheap prices and from being able to chose (in the case of Tesla) a new and cleaner way of transportation.

So what do you think? Is the government stopping the future?


  1. I think this is a very interesting topic. I think America is not only hurting its economic future but also the future of the planet. All we hear about, these days, is how we have to use green energy sources so the earth continues to thrive. With so many places having problems with Teslas, America is making no progress, therefore leaving more polluting motors on the roads. I think America has to look at the bigger picture and allow Teslas to be sold throughout the country.

  2. Josh, I also really enjoyed reading your post and think that you bring up a very interesting point. I also believe that the environment should stand first in this situation. Our society is so caught up in the idea of money that we can't even spare our world the cleanliness it requires. Teslas should definitely be allowed to be sold throughout the United States.

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  4. Josh -
    My dad actually owns a Tesla and he always talks about how great the Tesla company works to provide for its customers. Tesla seems to truly care about making the world a better place. My dad saves a lot of money each year by not having to pay for gas. Tesla superchargers, which are placed all across the country, are free to use. Tesla cars are much healthier for the environment and Tesla works hard to help out its customers. I don't think it's right for Michigan to ban the sale of these environmentally friendly cars.

  5. Josh, Fine job blogging this term in general. We talked about some additional points the other day. But, with this post, I wonder if America is stopping the future or if it is the car lobby? Only at the end of the post do you begin to discuss environmental issues. Your casual tone here is a big plus, but I'd like to see you take a clearer stand on the issue from the get-go.