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Tesla fans horrified to learn politicians lie and there is no free market in NJ

New Jersey insults Tesla's intelligence. Tesla fans hate it when the law applies to them.

Tesla wants to sell you a car directly, with no middle man. My personal opinion is that this is a great idea. The problem is that since before Henry Ford there has been a cartel in this country of one sort or another that gets to decide who makes cars, and how they sell those cars to you. I support Tesla’s fight to undo a century of laws, but it is hard for me to get my brain around only Tesla getting an exemption. Most Teslarati seem to be totally cool with the idea of only their special interest getting its way. I could explain why they think Tesla should have this special treatment, but it is completely obvious, isn’t it?

The latest insult to Tesla fans comes in New Jersey. The general story line is that, like all US states, New Jersey has laws that say only car dealers can sell cars. Everyone was cool with this, and nobody really thought it was an affront to our cherished free market economy until Tesla came along and decided it wanted to sell cars direct. Tesla somehow was given a couple of franchise licenses from New Jersey to open two Tesla Stores despite the laws. Its third application got hung up. Then, according to the Tesla side, the executive branch two-timed Tesla and went back on its behind closed doors agreement to let - just Tesla - keep breaking the law (or changing the law somehow, even though that is the exclusive domain of the legislative branch of government in New Jersey). So now, the Tesla folks all hate Chris Christie, which is all the rage anyway these days, so welcome aboard the bandwagon.

For fun check out the Tesla comments under the news stories about this, or if you have unlimited time on your hands join a Tesla group or on-line forum. The comments are all about Republicans are bums, support the free market, and please let Tesla keep breaking the law, because it is just so obvious it should be allowed to. The fact that the legislature and the rest of the New Jersey government are democrats, that government controls the distribution of everything, from milk to pseudoephedrine (cold medicine), and that the businesses that have invested generations of effort in their dealerships have another view of the situation is beside the point. It is just so obvious that only Tesla should have an exemption to the law.

Ignoring the laws we don’t like is becoming a very popular thing these days. Want to buy and enjoy some marijuana? That’s totally cool in Colorado and Washington. “Ere…” There are places you can go to buy it there that have state approval. This despite the fact it is against federal law and we have a lot of people in jail for selling drugs. Our US Attorney General made a speech this month that helps explain the correct mindset for out forward-looking times. In the speech, which was way above my head, people tell me he basically said that if you are an attorney general, you should not enforce all current laws. Rather, just ignore those that are unpopular, or may someday soon be changed. Never mind the implications of such a move away from a law-based society. It just makes good sense, right? If you’re not following this you must be dumb.

The last fight before the New Jersey fight for Tesla was in Washington State. There Tesla was doing OK. Public opinion is waaay on Tesla’s side there, and rightly so in my opinion. However, there were these inconvenient distribution laws making what Tesla was doing illegal. The Tesla folks were crowing loudly about the free market, and how a company should be allowed to sell you its products however it wants to leading up to the resolution. My understanding of how Tesla won that fight is this. First it got a limited exemption to the law. Next it successfully lobbied to have the law amended. The law was amended to basically say that anyone with a special exemption prior to such and such date could sell electric cars directly. Only Tesla had such an exemption on the date listed, so this new law applies only to Tesla. All the noise from the Tesla folks immediately stopped after a quick round of celebratory stories and such. Georgia just did basically the same thing.

This new normal sounds good to me. I want to start my own lottery and sell the tickets to your children. At their school. The winner of the lottery gets free solar panels for their home, which is clearly the right thing for everyone. Turns out, my business plan is (currently) against the law in a lot of places. I’m not worried though, because if enough people are on my side I just need a temporary exemption, then an amended law that says only I can start a child-focused school lottery. The attorneys general already understand my plight and they will support me by looking the other way because the law discriminating against me is unpopular and likely to be changed sometime soon. If you don’t agree with this you must be dumb. What part of the free market don’t you get?

Related Stories:
Tesla: wrong move, New Jersey
Tesla wins battle against auto dealers in Washington state, but future rivals are screwed

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Comments

I live in Wyoming. Laws here are suggestions for our consideration. There is a long, American tradition for ignoring the law when the law is obviously stupid. It's unAmerican to ASSume that just because it's a law, it is good. On the other hand, you're totally right to point out the short-sightedness and hypocrisy among many of the Teslarati.
The Affordable Care Act, as it's so adorably being called again, is setting a fine example of this sort of thing. No longer a nation of laws, but of men.
Here is a long read, but a good one elaborating on why the law doesn't make sense: http://www.techdirt.com/articles/20140311/15270526534/corruption-index-if-state-moves-to-ban-tesla-direct-sales-its-sign-corruption.shtml Especially chuckle-inducing is the bit at the end about the Horse Association of America's efforts in the early days of the automobile. I don't necessarily agree that Tesla should be above the law and other companies should have to comply (although the unique needs of electric vehicles may be sufficient justification), but I don't think the law should exist at all.
Laws like this one, which include licensing requirements, "bar association" memberships, and so forth, are all protectionist schemes. They're often passed under the hubris of being made to "protect people," but are really just ways for the insider's club to hold sway over a specific business or industry and pave the way towards monopolies and cartels.
I couldn't agree more with both Luke and Aaron. However, it still seems wrong to simply keep a law in place and exclude just one company or one person. To me that is worse in many ways. The main point I am making is that much of the noise being made by the Tesla side has nothing to do with principle and much to do with just wanting to get their way. I'm still trying to find a copy of the actual NJ law and the actual NJ rule that was voted on by the RMV committee this week. Any links are welcome.
We the people elect politicians to govern our society for the good of the most. If, because of technological evolutions, the law that was initially put in place does not hold it's justification, well it turns out that the people will get their politicians to modify or even completely remove the problematic law. Here, there is a very strong feeling that the law was put in place not for the good of the majority, but to protect the interests of a small interest group - namely car dealers. At the next election, the people might very well vote to replace the politicians that did put this law into place and could get this law to be completely rewritten. I would bet on that.
First, that's not exactly true. We have a representative republic with democratic elections, but that doesn't mean the will of the majority always or even most of the time becomes law. Second, this scenario hasn't played out in Texas or Arizona and doesn't look like it's even going to be considered.
Francois, I like the way you think. The big problem is that let's say you are at the polls and there are some choices in front of you. Let's start with governor. Assume two picks. One wants exactly what you do with regards to Tesla. However that pick is also opposite to you on two other things. Maybe gun control, maybe abortion, maybe taxes. Now what?
You have to vote on the politician that has the most ideas that are in line with what you think or want. It's not perfect, I think it's called democracy, but I think it's the way to do it. The problem, in this case, is that the politician involved seems to be going in the direction of a small group of interest, at the detriment of the majority. Usually, the majority remembers this when the next election comes along!
Its a little bit unfair to say Tesla wants exceptions 'just for itself'. They are challenging the rule of law that only dealers can sell cars, they sell direct not through dealers. They stand for a direct sales model, of which they are the only manufacturer trying to do this. A law modification to allow them to sell would enable others to follow, which is why the dealer associations are pushing back so hard. Consumers by and large don't want the dealership model anymore, we can but computers direct. shoes direct, you name it. Tesla have a following not just in their ranks, but in the general populace as well. Politicians may think they have 'won' against Tesla, but may find themselves looking for alternative employment after the next election.
JPWhite, thank you for you for adding these points. I support Tesla's bid to sell direct and I get what you are saying, but Tesla stops lobbying and posting requests for support as soon as it has its solo exceptions (WA, MA, GA etc) Tesla (and its supporters) doesn't care about the free market or stand for any principles in business related to that theme. With regard to computers, sure you can buy one anyplace, direct (Dell) or retail (Best Buy). But how will you hook it up to the internet. You will use one of the few providers that your local government has sold a franchise to. Government does not allow direct internet sales in my state. It allows the individual towns to award franchises. Here I have the choice of only Comcast or Verizon. Both paid the price to be allowed to operate here. The sale and distribution of alcohol, milk, tobacco, cold medicine, medical care, financial services, and even homes is tightly regulated by state and local governments.
Sure Tesla stops when it gets the exceptions it desires. However in doing so it has now created a legal 'precedent' making it easier for others to follow on their coat tails.I think it unreasonable for them to carry the entire burden of changing this law. Your internet comment has a parallel. If I buy a computer as you say I have to 'hook it up'. So. If I buy a car I have to drive it on a road. Computers and cars sales should be open to the free market. Infrastructure tends to be govt regulated since all computers/cars share said infrastructure. I view a car just like a pair of shoes, or a computer. Let me buy direct if I want to, its a valid sales model. Infrastructure? We have govt regulated monopolies or duopolies.
I'm glad you kept up the dialogue. I'm starting to see it your way. Thanks
Here is my problem with this right-wing mentality: Why the unnecessary put downs of Tesla fans? 1. I don’t think they want an exception just for Tesla, it’s about free-markets for all, not just the markets republicans and democrats agree on. 2. They’d prefer the law to change, but in the meantime Tesla is going to push the boundaries of what it can to sell more cars. I don’t think most people have a problem with this. The dealers and their associations show their intelligence with statements like it’s simply “unfair”. Ridiculous! If they were honest and offered a competitive service and sales products (that didn’t need protections) - they wouldn’t be so worried.
I'd love to be able to buy a car direct. I'm on Tesla's side in that fight. I am just not pretending my opinion has anything to do with the free market. Are Tesla fans still fighting for free market car sales in WA where only Tesla can sell direct? How about in Georgia? I live in Mass and as soon as Tesla was able to open their stores here there was no further Tesla-supported discussion or advocacy for any free market push for car sales to be direct. Not sure where you got the right-wing thing. New Jersey is almost entirely controlled by the Democrat party, is it not? The Senate has 34 members of the D party and 16 of the R party. The General Assembly has 48 Ds and 32 Rs. Aren't the democrats making the laws in New Jersey? Here is an interesting quiz for you; Who was the American International Automobile Dealers Association president from 2002 through 2006? Here's hint, she has been a democratic party advisor to President Bill Clinton and also has worked closely with Terry McAuliffe, democratic governor of VA at an electric car company.
I think we actually agree on this, and if the democrats did pass this ban, I'd be equally upset with them. Hypocrisy on either side of the aisle is a problem! However, the NJ legislature didn't pass the ban, the Motor Vehicle Commission did - which is made up of all Republicans. (4 appointed by the Governor, plus the Attorney General, the State Treasurer and the Commissioner of the Department of Transportation. The eighth position, a non-voting member, is reserved for the Chief Administrator of MVC - who has only worked for republicans in the past). And of course Tesla is not going to keep incurring costs to continue the fight for the free market? Why would they? It would be spending money to potentially benefit future competitors.
Thanks. I think we mostly agree as well. I've tried to find the actual law and actual rule that the vote was on this week and haven't found the text anywhere. I see your point, and it is valid. However, one way to see what has happened is the recent vote simply clarified the RMVs position to support the existing law, which is Tesla's real problem. Again, at least as far as I can tell that is one way to see it. - On a separate note, and I mean this lightheartedly, as we learned in Mass over the past 20 years, one big advantage of an executive branch completely under the control of a democratic legislature is that when things go wrong there is a someone to blame. After a while that gets old and the state just goes entirely democratic, and then things are less interesting.
Great article John. I totally agree with your point about how fair is it to be able grant exclusions/exceptions or waivers to laws which are supposed to apply to all? But then, as everyone knows - that is how lawmakers work these days, starting with the Executive branch leading the way. They don't like a law - they just instruct it to be ignored. Health care compliance too troublesome - just delay a year. Or 2 years. Many, many examples. Great piece of writing!
Thanks. A positive comment is always welcome!