In a move that is blatantly anti-competitive and anti-consumer, the New Jersey Motor Vehicle Commission (NJMVC) enacted regulations that, beginning April 1, would prohibit non-franchised, non-licensed businesses from selling vehicles in the state. The regulations would effectively prohibit Tesla manufacturers from selling directly to buyers in New Jersey.
You can buy an iPhone at a Verizon store, Best Buy, or at an Apple store, but if you’re trying to buy an electric vehicle directly from the car producer in New Jersey, you’re out of luck.
Proponents of the regulations—primarily dealerships and their associations—argue that the regulations are for consumer protection to provide car buyers with the necessary information and competitive prices for buyers to make informed choices. This is a completely antiquated view that disregards the availability of information in the modern age.
In response, Tesla wrote on its site that “the Administration and the NJMVC are thwarting the Legislature and going beyond their authority to implement the state’s laws at the behest of a special interest group looking to protect its monopoly at the expense of New Jersey consumers. This is an affront to the very concept of a free market.” Further, Tesla lamented the fact that neither the company nor the taxpayers had a say in the matter.
While this is undoubtedly true, there is a bit of the pot calling the kettle black here. Chairman and CEO Elon Musk and his companies (Tesla, among others) have had their share and benefitted from an array of government handouts in the forms of government loans and special tax breaks, all without any say from the taxpayer.
Pointing out the hypocrisy is not to denigrate the value of Musk’s ideas as an innovator and entrepreneur. And taking advantage of government handouts is certainly different than lobbying for them. But Musk has said that he would “certainly back” an increase of the electric vehicle tax credit from $7,500 to President Obama’s proposed $10,000 and called for a carbon tax. If Musk is confident in his products, he shouldn’t lobby for using other people’s money to help consumers purchase them.
Indeed, the real blame here belongs with the politicians who dangle these policies in front of investors in hopes of building plants in their districts and to help them out come election time. We see this crony behavior when the federal government involves itself with decisions that should be made in the marketplace.
Rather than trying to prop up alternative vehicles and create more cronyism with subsidies and special privileges, federal and state lawmakers should focus on breaking down artificial regulatory barriers that stifle competition and choice, which could really drive the development and success of alternative vehicle technologies.
