Tag: Tesla Motors

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too much government

Against Innovation in Ohio

Why so many things are made in China, or Taiwan, Singapore . . . or Mexico?

I have no beef with foreign trade, mind you. Just as I don’t want government to favor one business over another here in the U.S., I don’t really want that to happen across borders, either. I know what comparative advantage means.

But one reason we rely so heavily on imports is that we don’t have a free market in the states. Too much regulation favors some businesses at the expense of others.

Tesla Motors is trying to sell its cars direct to the public. But, in most states if not all, the market for automobiles is heavily regulated. Direct, factory sales are prohibited by law. Why? To protect dealerships.

So, after the Ohio legislature failed to make a special deal to keep Tesla’s electric car out of the state, a number of special interest groups, including Midwestern Auto Group and Ricart Automotive Group, have sued Tesla, the Ohio Department of Public Safety, and the Ohio Bureau of Motor Vehicles. The idea is to get Tesla’s license to sell cars in the state revoked.

Forget competition and the innovation it brings. Instead, businesses conspire with governments to keep out upstarts, competitors. You know, the innovators.

Tesla’s electric sportscar may be way out of my price range, but it would be interesting to see an electric car actually make a go of it. I hope the suit fails, and we get to see whether Tesla can make it on the open market.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

Slow Times for a Fast Car

How economical are electric cars? It’s hard to know. We don’t have a free market setting in which to judge the question.

Their obvious advantage? They don’t pollute.

But, skeptics remind us, their electricity does have to be first produced, and the most likely additional source? Coal. Dirty coal.

But isn’t it easier to put on scrubbers at a central plant rather than on millions of cars? Maybe electric cars really are a promising low-pollution transit option!

In any case, electric tech’s progress (or lack thereof) remains fascinating. When I wrote about the Tesla Motors electric sports car back in 2006, I was enthusiastic. But since then the car has not exactly “taken off,” and the company has received a huge, huge hunk of money in the form of loans from the Department of Energy in 2009, so it looks like just another Solyndra-like boondoggle.

But wait: It turns out that the company has faced an uphill battle: government.

The states heavily regulate auto dealerships. You know, “for the consumer” (read: for a few privileged dealers). Indeed, this regulation at the state level has plagued America’s auto industry for years. And dealers, privileged by these protectionist laws, really, really hate Tesla Motors’ marketing model: direct-to-customer.

In Colorado, car dealers got the law changed to prohibit direct-to-customer auto sales.

I hope Tesla sues to overturn the state dealership laws as illegal under the Constitution — after all, they do precisely what the interstate commerce clause was designed to prevent.

More likely, though, Tesla will seek and get an exemption from the Energy Department. And American mercantilism will continue.

This is Common Sense. I’m Paul Jacob.