It’s not just about one little electric car company.
Tesla officials told Wisconsin legislators at a January hearing they want to do business in the state, but to do that they need an exemption from Wisconsin laws prohibiting automakers from directly operating or controlling a dealership.
Jonathan Chang, an attorney for Tesla, told a packed hearing at the state Capitol that driving the company’s innovative all-electric vehicles requires direct contact with customers to teach them about the electric vehicles’ technology. To do that, it wants to sell the cars online and through its own stores using its own employees.
“Franchise dealers aren’t able to sell these cars. Dealers aren’t willing to invest that time,” Chang told legislators. “We’re not here to overturn the franchise system. It sells internal combustion engines well. But the law shouldn’t be used to block new companies from entering the free market.”
Tesla owners were there to back him up, saying they were tired of driving hundreds of miles to Tesla dealers in Chicago and Minneapolis to buy Teslas or have their vehicles serviced.
“It’s a shame we have dozens of dealerships with Japanese and German cars in our state, but we ban high-tech cars manufactured right here in America,” said one.
That was echoed by state Sen. Chris Kopenga, R-Delafield, who said: “The facts are we have a Fortune 500 company who wants to do business here. The principle of free market and government is what we’re debating here.”
There is some truth to that, but the proposed legislation to give Tesla a carve-out and exempt it from state franchise laws would quite likely give it a competitive advantage over other automakers and that in turn could well invite lawsuits.
What Tesla is arguing for is “vertical integration,” where a manufacturer controls the making, and selling, of its products from start to finish.
That can give the manufacturer some decided economic advantages, because it can open and close stores as it sees fit, change products quickly and efficiently if it wants to and often gives it control over after-market service and repairs — which can be lucrative.
But the fact is, too, that there is nothing to prevent Tesla from making arrangements to set up franchise dealers in the state and providing the training it says is needed to educate Tesla owners — just as other auto manufacturers have done for decades. It just doesn’t want to.
We’d love to see a bevy of all-electric car dealerships in the state.
The question is whether a Tesla carve-out from state laws would give one automaker a competitive advantage over other automakers — such as Ford, GM, Toyota and others — who might well relish the idea of such total control of their products.
Where is the level playing field in that? It seems to us that by passing such an exemption for one manufacturer the Legislature would essentially be picking an economic winner. That is not its job.