Antiquated Regulations Limiting Tesla’s Innovation

In our discussions during class, we often talk about outdated and unnecessary economic regulation. You can spot these inefficient rules because they may do one or more of the following; create undue economic hardships, stifle competition, reduce customer choice, and/or prop up outdated business models. An example of this could include rules forcing new apartment complexes to also build in-ground parking. This rule causes developers to include the substantial cost of building the parking structure, regardless of the tenants needs for this type of parking.

Most of the time regulations such as these, although frustrating to deal with, have some logic behind them. In the case of apartment complexes and parking structures, the argument could be made that by not requiring parking, the city leaves the door open to a major parking shortage. In the worst cases of these superfluous regulations, innovation and progression are held back in favor of keeping that status quo.

One of the most recent examples of such regulations is the case of Tesla motors and their desire to directly sell to consumers. In many states, car manufacturers are not allowed to sell to the public. They first must sell to a dealership who then can sell to the general public. The idea behind this that originally car manufacturers were more interested in bulk sales anyway. The dealership allowed for a personal relationship during the buying process, and gave the buyer a place to go and receive support after the purchase was made.

Tesla’s cars are on the edge of electric vehicle innovation. The Model S provides almost 300 miles of range, good power, and all kinds of forward thinking features. To keep the car affordable, Tesla wants to sell them directly. I believe Tesla should be allowed to make such sales. If post purchase support is an issue wouldn’t this be reflected how the market reacted to Tesla direct sales? People are making bigger and bigger purchases online, they don’t need the human contact to open up their wallets. Nor do they require the same support as they did in the past due to our ability to look up information on our own. Direct sales of cars should be allowed. Let the manufacturers sell to whomever they wish, and if dealerships due in fact provide a valuable service, then they can still continue to thrive as well. But propping up a old industry because that how its always been is not a good enough reason for me.

Andrew Jones


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