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?