An Automotive Tale That Parallels The Tucker Story
Tesla Motors CEO Elon Musk is finding himself trapped in a struggle as he looks to revolutionize the auto industry in a similar fashion as Preston Tucker looked to do over 60 years ago. The difference? As Tucker was up against the big automakers of the time, Musk finds himself battling the huge auto dealerships that have been ripping off America for years now. The fight is over the fact that Tesla Motors does not use dealerships to distribute their product line, instead selling directly to the consumer via the Internet. This has pissed off the major dealerships across the country, who are teaming with state governments to pass laws banning the direct to consumer sales approach with cars. Who ends up getting fucked here the most besides Tesla? We the people of course!
This fight recently found its way up to the political level with a few state governments needlessly getting themselves involved. The governor of New Jersey Republican Chris Christie is the most current man to dip his foot into the fire affirming his allegiance to the side of the dealership middlemen by banning the sale of Tesla vehicles in the state of New Jersey the other day. So what we have here is literally the governor of New Jersey putting through regulation that forces you to go through a crooked middleman to buy something many people view as a necessity. When a business model such as the one car dealerships use is proven to be antiquated rather than move on with the times some states are digging in their heels and follow their noses to the money. Texas and my state of Arizona have similar unjust laws on the books as well.
Why Should You Be Concerned About This?
Being the new kid on the block in the auto industry is not an easy thing to do. This kill or be killed industry has always managed to keep the competition as slim as possible. But Tesla Motors works a little bit different. Elon Musk, who is also the CEO of SpaceX, has been effectively utilizing the power of the Internet and social media making Tesla a very popular well known brand by most people in America. They are a fiscally sound company, so much so that they paid off a half-billion dollar loan from the federal government under 10 years in advance of the due date. They make high quality luxury electric vehicles, and because there is no dealership marking up the shit out of them they are affordable, if you’re the type who could afford a luxury car.
Initially, Tesla could not afford to set up a network of dealerships across the country and as a result used their website to sell the cars directly to the customers. Well it turned out this was a better way to do things and they were able to save customers and themselves a shit-ton of money. The problem is though dealerships are really threatened by this model, as it completely cuts them out of the picture. They are fighting for their lives and are willing to fight dirty because with a franchise agreement a dealership can in essence have a monopoly over huge regions of the country. This monopoly gives dealerships the ability to control pricing, financing and everything else that goes along with the painful car buying experience.
With New Jersey making it law these cars have to go through dealerships, the state government is guaranteeing dealerships a cut of the money. That’s your money America. To add a big middle finger, Christie did it unilaterally too through a state commission, instead of via normal legislation. This just smells so dirty, I don’t even know where to begin. Surely I can’t be the only one to see how corrupt this looks. Arizona, Texas and New Jersey… You are being called out!!! As citizens, regardless of whether or not you like Tesla Motors, we should all be really pissed off about these kinds of laws.
The Power Of The Media
One thing Preston Tucker didn’t have on his side is the power of the people and the power of the Internet. If mainstream America had known what was really going on at that time in 1948 when Tucker was fighting to change the way cars were built the auto industry could have taken a very different path. If enough people today see this bullshit that is happening to Tesla Motors they can raise their voice, and just maybe it could help make a difference. State governments banning these sorts of auto sales not only hurts Tesla Motors, but it hurts every man and women in the country that has to buy a car.
Imagine a world without the high markups of dealerships where you just paid for the car with only the manufacturer making a profit. No more money going into the pocket of slimy salesmen looking to rip you off. No more money for the greedy dealership scumbags. The direct to consumer approach is a win for everyone. It gives small upstart business models in some of the more established industries a fighting chance, and let’s face it… There’s not a lot of extra money to go around like there was in the past as American families have buttoned down their budgets from years of living in a tough economy.
As for recourse, Tesla is probably going to have to take the expensive route of the Supreme Court. Along with Texas, Arizona and now New Jersey, both New York and North Carolina are considering similar bans. They are using the guise that a luxury car manufacturer selling directly to the public is somehow unfair competition with the rest of the market. This could mean large portions of the United States might not be able to purchase a new car without using a tightly controlled service all thanks to this attempt to ban Tesla.
Once these dominoes start to fall, the momentum will make it difficult to stop. This is not how a free market economy is supposed to work, but is what happens when state governments get into bed with big business. If this pisses you off, and it should, you need to write or e-mail your local politicians and representatives and let them know how you feel about it and tell them not to act or pass legislation regulating it. These kind of laws are un-American and the market should dictate how companies do business, not government.
What do you think? We’d love to hear you sound off with your thoughts in the comments below!