Tuesday, April 22, 2014

Affording Tesla the Freedom to Fail

By Benjamin W. Powell 

New Jersey recently joined Texas, Arizona, Maryland and Virginia in banning direct auto sales to consumers. That touched off an uproar on the left and right, and many consumers remain confused. They can be grateful for one clear statement of what the ban is really about.  “If you allow someone to come into the market with no overhead, that’s an unfair advantage,” says Deborah Dorman, president of the Eastern New York Coalition of Auto Dealers. She represents traditional automakers who use a dealer network to distribute their cars.

They don’t like competition and want the government to forcibly prevent companies from selling directly to consumers in order to protect old and potentially inefficient distribution networks from being displaced. Such bans impede consumers from finding the best deal through the market’s discovery process.   Some on the left claim that the ban unfairly targets manufacturers of electric cars. It primarily involves Tesla, but consumers should shed no tears for that company because Tesla is a welfare queen……To Read More…. 

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