Anti-Tesla bill rolls forward

Who’s that? Oh, it’s my good friend Crony Capitalism! I haven’t seen you in a while!

So, here’s the deal: a startup which you may have heard of presently makes the best car in the country. Tesla is disruptive to all sorts of industries in various ways: oil companies, fuel distributors and retailers, traditional car producers, and a weird sub-industry that you may not know much about: car dealerships.

Car dealerships are a really bizarre case study in crony capitalism, going back decades. In the US, car “dealers” are independent businesses which have relationships with (but are not operated nor owned by) auto manufacturers. Dealerships have formed associations which have leveraged their collective clout to pass state legislation which forbids manufacturers from selling vehicles directly, thus ensuring that these middle-men can continue to take their cut.

This is a special issue for Tesla, because there are no Tesla “dealers” – there is only Tesla. They sell their own cars. No independent entities acting as middle men and driving up costs. And in NC, that’s quite possibly going to be illegal.

This is such a clear-cut case of cronyism that I can’t even summon the ostensible reason for it by googling and perusing mainstream news coverage. Usually this sort of thing is accompanied by some very strong PR that provides some kind of flaky justification for the laws, but as far as I can tell the argument boils down to “people like to buy from dealers instead of manufacturers.” Which, if true, would kind of mean that the law wasn’t necessary, don’tcha think? From the WRAL article:

Asked if the clarification measure didn’t just protect the dealer’s business model, Glaser argued that it was a consumer protection. Dealers, he said, are the ones that sell cars face to face and provide service.

Ahah! Of course! We need this law that says people must go to dealers, because people go to dealers now, because they must go to dealers! Um.

Anyway, SB327 expands the language of the current protectionism to expressly target Tesla and any other disruptions to the dealership system. They even did manage to work some ideology into this one, hating on Tesla for using its hippie nonsense “electricity” and living fat off of government cheese:

“Are you still receiving government subsidy?” asked Sen. Tommy Tucker, R-Union.

O’Connell replied, “Sir, we’ve never received a government  subsidy. We have a loan from the Department of Energy, which we are already paying off, and we’re paying it off early.”

Pinkos! Sucking on the teat of government! Unlike our hard working dealers, who are succeeding in the free market! Um.

Anyway, keep an eye on this one, because if they do retain the anti-Tesla dealership protection language it will give the lie to the “ooooh free markets! pro-business!” rhetoric that we’ve been hearing from the GOP in Raleigh up to now.

5 thoughts on “Anti-Tesla bill rolls forward”

  1. Passed the commerce committee UNAMIMOUSLY this week, fer crissakes 🙁

    I think the best quote in the stories I read was:

    “You tell me they’re gonna support the little leagues and the YMCA?” Glaser asked, directing his glance at the Tesla contingent milling about a few feet away in the legislative building

    Yep… there it is. Let’s criminalize a business model because we think the business might not sponsor enough Little League teams.

    In related news, what’s the status on Durham’s food-truck regulations? The last I remember reading was that (late last year?), some revisions were being considered that might slightly reduce the blatantly protectionist language, but would still leave a lot of baseless restrictions in place.

  2. My recollection on food truck regulations is that the Council quickly trashed or severely crippled the really ugly stuff that was initially proposed (proximity to fixed restaurants being key there). I don’t recall whether any meaningful changes were actually enacted, but as I understand it both Raleigh and Durham are generally in good shape, at least for now.

    Chapel Hill on the other hand has ugly licensing requirements that very few trucks are meeting. I know there’s been some grumbling about fixing some of those requirements, but it’s not obvious to me that Chapel Hill is interested in allowing this kind of business to succeed there.

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