TED Conversations

Drew Bixby


This conversation is closed.

Tesla was blocked from selling cars in Texas. Is this a bad sign?

In the book Why Nations Fail, (http://whynationsfail.com/) the authors argue that inclusiveness is what made the US great and extractive-ness is what makes nations like Venezuela fail. Very generally, inclusiveness means everyone has an equal opportunity to compete and the laws support such an environment. In contrast, extractive-ness is an environment where rules, over-regulation, political favors, and financial weight give preference to certain groups over others.

This case with Tesla seems very "extractive"/non-iinclusive by their definition. Is this just isolated or is this a bad sign for the state of things in the US?

In case you are not aware, here is a brief synopsis of the Tesla case:


Showing single comment thread. View the full conversation.

  • thumb
    Jun 16 2013: It's a good sign. Or rather a good consumer policy. Texas Law say that cars for public sales must be sold through local dealer ships. Like anyone who ever bought a car didn't have to take it back to the dealer for some reason, even scheduled maintenance. So, Tesla wants to sell cars from California to some buyer in Austin, TX. 3 months later, the clock falls off the dashboard. Where does our buyer take his car for fixing? All the way back to California? And lets say there is a bigger problem, does our guy go to Federal Court to seek redress, After all, it's across state lines.
    Are these real consumer problems? They were and that's why the laws were passed.

    The bigger question is... Why doesn't Tesla open dealerships in Austin and all over Texas?
    Further, as a Texan, I like to think the way Texas goes, so goes the nation. But, to be honest, not so much..
    So why does this example effect national policy as implied?
    • thumb
      Jun 17 2013: MIke, Thanks for your comment and role in discussion.

      Regarding your first point, how is a California company selling to someone in Texas any different than the thousands of other products sold that way every day?

      Regarding the bigger question, Tesla doesn't open dealerships BECAUSE of the lawsuit. They have a "showroom" here in Austin, however, they can not sell cars out of it and can't even say a price because of the laws. The laws require them to work with existing dealerships and the current system in place which limits who can participate and how. That seems very non-competitive to me.

      Why does this effect national policy? Well, that is the question. Is it a sign? I think it might be after having read Why Nations Fail as mentioned above.
      • thumb
        Jun 17 2013: Drew,
        Like Amazon from Washington sells more stuff the can be counted?
        Amazon has a different marketing strategy the any automaker. I think if Ford could sell cars without a dealership arrangement and Tesla was denied, the argument would make more sense to me.

        Honestly, I haven't read the book nor am I completely familiar with the lawsuit. There are several dealerships in Austin that handle cars in the 6 figure range. I am confused by all the legal play. The state law I understand.for consumer protection.
        Are you making the case that Tesla is being denied dealerships?
        • thumb
          Jun 17 2013: My case is that it is proving difficult for a new entry in the car market to sell their cars. There IS a lot of legal play and I propose that is the problem. The laws are hindering competition. Competition is a critical part of a healthy inclusive market.

          When is the last time you saw a new entry into the car market?

Showing single comment thread. View the full conversation.