Everyone who’s been following the story of Tesla is well aware of the war between the iconoclastic automaker and the country’s hidebound auto dealerships. After a decade of highly colorful struggle and strife (which I
However, even if Big Auto wanted to break it off with Big Auto Dealership, it isn’t going to happen in the US, where auto dealers and their trade associations wield a lot of political power. The top dealership groups in America have collective annual revenue of $10 billion, and they command more market share than any automaker. “These are huge multistate businesses. Lots of them are publicly traded, and they’re politically extremely powerful,” says Professor Crane.
This local concentration of political power has created another strange situation: state dealership laws don’t correspond to political divisions. “Deep-red Utah allows direct sales, but blue-blooded Connecticut does not,” Mr. Meyer writes. “Tax-and-spend California permits direct sales, but free-market-loving Texas doesn’t.”
Supposedly freedom-loving Texas has been one of the major fronts in the Tesla-vs-dealers conflict . In 2013, Elon Musk personally testified in favor of a bill that would have carved out an exception to the state’s ban on direct sales. “It is crazy that Texas, which prides itself on individual freedom, has the most restrictive laws in the country protecting the big auto dealer groups from competition,” said he. The pro-Tesla bill failed to move forward in the legislative session.
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