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The Daily Wildcat

The Daily Wildcat


    Tesla electric cars only a shock to old fogeys

    There are three boxes to check when considering if a car is great: design, innovation and build quality. Good cars check one box, great cars check two and the few excellent cars fill all three. They are pioneering, well-built and beautifully designed.

    Tesla’s Model S is one of those rare cars. Its long, sleek, full-sized design stands out against bloated competitors, and it can travel up to 300 miles in a charge, a range far beyond any of its rivals. For these reasons, and many more, the Model S has earned Consumer Reports’ Best Overall in 2014 and received a 99/100 on the overall road test.

    Most importantly, the Tesla Model S is an American car — as in, designed and built here, not just headquartered.

    Considering that so few companies build in the U.S., and how often we hear both sides of the aisle call for more American manufacturing jobs, the success of Tesla Motors has, surprisingly, repeatedly been met with skepticism and restrictions.

    Why are dealerships so eager to fight against a small boutique automaker?

    Tesla’s desire to sell its cars directly to customers and cut franchise car dealerships out has drawn most of the blowback from pundits and auto-dealers. But Tesla CEO Elon Musk has expressed no radical interest in overhauling the dealership structure, only in providing direct sales to the consumer.

    Still, dealership networks are fighting Tesla by lobbying state governments to inhibit its ability to do business. Right now, Teslas are banned for sale in Arizona and face restrictions in six other, mostly Republican-led, states.

    Dealerships are threatened not by Tesla’s appeal — a brand consumers have expressed interest in — but by a future in which customers flock toward an option that gives them more control in how they buy, and less worry about dealer markups: a revolutionary new system with no room for middlemen.

    Further, Tesla, and electric cars in general, threaten maintenance as a major source of cash flow, as Marcus Wohlsen explains in a piece for Wired.

    “Teslas don’t have any of the parts that force you to take your car in for ‘regularly scheduled maintenance’ — services that can cost dearly at the dealer,” he writes. “It’s hard to charge for an oil change when there’s no oil to be changed.” Wohlson adds that Tesla’s use of prepaid warranties would hurt the traditional dealership model, where patrons pay per fix.

    How the Republican Party plays into this isn’t immediately clear, but dealership lobby money has fallen in party members’ pockets. Now it seems that they’ve forgotten their supposedly dear American-job-creation and free-market values.

    The GOP’s Tesla-bashing started when the company accepted a $465 million low-interest federal loan aimed at developing green technology.

    This loan has led many lawmakers on the right to call Tesla a failure because it needed special government assistance to succeed.

    Notably, before the 2012 presidential elections, then-presidential candidate Mitt Romney criticized Tesla as a failure and said that the government had no business investing in such companies. He compared Tesla to the failing Fisker Automotive, inferring that both were government investment mistakes.

    And yet, Tesla succeeded, repaying its loan nine years early and already turning a profit.

    This has led some to embrace Tesla, or at least its free market sales style, and to criticize the dealership oligopoly that it struggles against. Conservative columnist Charles Lane wrote an opinions piece in The Washington Post that was critical of both Tesla and of the push to block it in favor of the dealerships.

    “The dealer-based system was obsolescent even before the Internet,” Lane wrote. “As Web-based retail sales of other products began to take off in 1999, a General Motors executive said publicly that 80 percent of new-car sales could be factory-direct orders made online by 2003. He forgot about the dealer lobby, which mobilized to win state bans on Internet sales by anyone except an existing licensed dealer.”

    Perhaps Lane’s moderate statements are a sign of what is to come, showing a move away from the hypocrisy of embracing free market economics, except when they apply to this small car company.

    Hopefully, an innovative firm will no longer be stifled by an antiquated and fearful system, nor despised for irrelevant political bickering. Instead, we can see Tesla, an American firm, create American jobs. It should succeed or fail as a result of its own actions, just as a free market economy should allow.

    — Eric Klump is a journalism senior. Follow him @ericklump

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