12.4 C
HomeManufacturerInnovationHow Tesla's Fight With Car Dealers Could Help Decide the Next President

How Tesla’s Fight With Car Dealers Could Help Decide the Next President

Mitt Romney famously called Tesla Motors a “loser” company during his run for president. He lost, of course, and Tesla is by any measure winning. And so we see would-be presidential candidates lining up behind the Silicon Valley carmaker as its fight against auto dealers becomes a potential breakout issue in the 2016 election.

In dispute are bans several states have against Tesla stores selling cars directly from the company instead of through third-party dealers. The most recent ban was enacted in New Jersey with the support of Gov. Chris Christie, a possible contender for the GOP nomination. That prompted Florida Sen. Marco Rubio, a Christie rival, to heartily defend Tesla’s direct sales model.

“It’s an established product,” Rubio told CNBC. “Customers should be allowed to buy products that fit their need, especially a product that we know is safe and has consumer confidence beneath it.”

Perhaps even more surprising was the love shown by Texas Gov. Rick Perry, the once and possibly future presidential hopeful whose oil-rich state bars employees in Tesla’s two showrooms from even telling potential customers how much the Model S costs. On second thought, maybe it isn’t at all surprising. Texas is a leading candidate for Tesla’s planned $5 billion battery factory, which would bring thousands of jobs to the state. Perry said Texas should revisit its ban on direct sales of Teslas.

“I think it’s time for Texans to have an open conversation about this, the pros and the cons,” he said on Fox Business over the weekend. “I’m gonna think the pros of allowing this to happen outweigh the cons.”

Tesla Should Be Easy for Politicians to Love

The sudden GOP embrace of an electric car company once reviled as a symbol of Northern California enviro-weenies might seem ironic, but the political calculus isn’t hard to parse. Christie was well on his way to being anointed the consensus candidate by political pundits when a bridge traffic scandal sent his potential candidacy reeling. Rivals like Perry and Rubio clearly see a chance to kick Christie while he’s down by implicitly painting him as an enemy of consumer choice who favors cronies in the car-dealer lobby.

But the real irony is that conservative politicians and states ever opposed Tesla at all. The widespread franchise rules giving car dealers virtual monopolies in their territories epitomize the government-controlled marketplace Republicans purportedly despise. The rules themselves date back to the early 20th century when General Motors and Ford were monoliths and dealers were actually powerless. Today the bans on Tesla stores are such a naked example of stifling innovative competition to protect an incumbent industry’s business model that they look positively French. Few capitalists today embody the Ayn Randian entrepreneur-as-hero persona quite as convincingly as Tesla CEO Elon Musk, who also runs Space-X and Solar City. Yet until this week, at least, the GOP was happy to make him an enemy.

Of course, to suggest that opposing Tesla violates GOP principles is to assume that politicians are principled at all. More realistically, the politics of the Tesla bans reflect nothing so much as the truism that all politics are local. New Jersey banned Tesla stores because car dealers are a powerful lobby there, just as they are in Texas and in Ohio, where a similar ban is quickly moving through the legislature. And what state politician is going to stand up against them to support some Silicon Valley tycoon selling a car most constituents can’t afford anyway?

The Winner in 2016 Will Be Tesla

But the optics on the national stage are very different, as Rubio and Perry clearly realize. They get to portray themselves as opponents of cronyism and car dealers and champions of consumers, innovation, a celebrity CEO, and his incredibly cool cars. Over the past year, Tesla’s stock price has shot up dramatically as investors started to see the company’s long-range potential. Possible presidential contenders realize there may be political capital to be gained in supporting Tesla.

The real winner in this contest is, of course, Tesla. If the company can manage to associate its brand with all the positive qualities Rubio and Perry hope rub off on them, few politicians will want to take the risk to stand against them. Even if some state governments stand strong on their bans, the increased visibility of the controversy will call attention to the outdated rules protecting the entrenched car dealer industry–rules most consumers probably don’t know exist.

Already in New Jersey, Democratic state legislators are seizing an opportunity to score points against Christie by opposing the Garden State’s ban. This also is good news for Tesla. “Innovation” is a buzzword with bipartisan backing. If support for Tesla starts to be seen as a test of whether a candidate truly backs innovation, the shifting political winds could blow the bans on Tesla’s stores away. Back in 2012, opposing Tesla looked to the Romney campaign like a sharp way to bash the president’s failed green tech plans. In 2016, on the other hand, running against Tesla might seem about as smart as running against Apple.

Source By


latest articles

explore more