Tesla, Uber, & Internet Sales Taxes – Quit Being So Easily Duped

If you’ll please forgive a bit of navel gazing, we need to have a little talk about social media, political action, issue advocacy, and earned media.

I’ve always avoided characterizing what Peach Pundit “is”.  I find that really is in the eye of the beholder.  But I have found over the years that we have an evolving role in public debate and issue advocacy.  I’ve also started to notice a pattern.  We’re all being used.

Readers of right-leaning political blogs tend to fit a profile.  We’re libertarian leaning with a bit of a populist bent.  There’s nothing wrong with that.  That’s our market segment, and that helps those that wish to market to us hone a message.

I’ll use this week’s story about Tesla wanting to sell cars directly to consumers as an example of what I’m talking about so this makes sense.  It generally follows an accepted formula to help you engage on their behalf, without letting pesky facts or shades of gray enter into your strong belief that Tesla is a complete victim of overarching government regulation and greedy auto dealers.  Got that?  Let’s begin.

The first step in this process is that a news story is “originated”.  In cases where the company has a legislative interest at stake, that’s often with the help of a skilled PR firm.  There’s no shame in that, and I’ve had PR contracts with companies that do this sort of thing before (client interests are disclosed on the rare occasion I write about my own clients).  News is rarely organic these days.  PR folks help make sure the right message gets to the right people.

Then, via the magic of social media (including folks like us), these stories spread.  Often with a unified theme.  In Tesla’s case, this is a company that is not allowed to sell cars in Georgia which is a violation of the free market.  Why isn’t Tesla allowed to compete like a company should?

Cue outrage.

The problem is that in most cases like this, “free market” is a meaningless bumper sticker slogan designed to draw you in without any analysis of the actual facts or merits of the situation.  “Free market” is a concept.  For it to exist in reality, we would have to live in a world without taxes or regulation.  We don’t.  So what happens to Tesla’s argument if we make the subtle change from “Free Market” to “Level Playing Field”?

Well, first we would have to look at the fact that Tesla managed to turn itself into a legitimate company courtesy of a Federal loan in the amount of $465 Million Dollars.  This was in 2009, when private capital from the “free market” was quite scarce.  To be fair, GM and Chrysler (now Fiat) got a lot of government money too.  But the folks screaming “free market” are still upset with GM and Chrysler, often citing that the Government shouldn’t pick winners and losers.  Tesla was picked as a winner too.

Tesla also represents an example of government privatizing profits and socializing losses.  As this Slate article points out, Tesla’s loans were given at rates well below anything would have been offered from the private equity markets.  Now the company has a $35.6 Billion dollar market cap.  The government didn’t get equity that would be accustom to a high tech startup.  Instead, they got roughly 3% interest.  How’s that “free market” looking now?

It’s looking pretty good.  Tesla announced yesterday that it will be building a plant in Nevada to build batteries.  Government incentives are estimated at $1.2 Billion over the next 20 years.  This is where “level playing field” works better for Tesla.  It’s hard to call $1.2 BN in incentives “free market”, but auto plants routinely get $300M-$500M in incentives for a new plant.  Tesla has some “buzz” to generate a bit more, and the scope of the plant may be bigger.  Or, Nevada just needed the win and overpaid.  Regardless, not “free market”, but every manufacturer plays the same game.  Tesla got a big win from Nevada.

If you buy a Tesla in Georgia, the “free market” will give you $12,500 in income tax credits.  You can take an additional $2,500 if you buy a charger for your business.  You get to drive in HOV lanes with only one passenger in the car for free.  And Georgia Power will give you reduced electric rates.  That’s some level playing field they have there.  But if that’s not enough, Tesla’s website asks you to contact your state representative and ask for more.  To level the playing field.

So what’s the problem?  Tesla doesn’t want to sell cars through independent dealers.  Instead, they have a fairly nondescript sales and service center off the 120 loop in Marietta which is company owned.  That’s only legal in Georgia because Tesla got an exemption provided they would only sell 150 cars per year.  The Georgia Automobile Dealers Association claims they’ve sold 173 cars, and wants them to stop selling cars.  Cue the manufactured outrage.

You can get an idea of the typical response from the comments in this post from earlier in the week.  They can be summed up as

1) Auto Dealers are greedy and thus should be punished.

2) Auto Dealers have lobbyists.

3) Any attempt by the greedy auto dealers and their evil lobbyists to not let Tesla do exactly what it wants the way it wants is a violation of the free market.

It’s the same it you take out Tesla and insert Uber, or internet merchants.  Exactly. The. Same. Argument.

Let’s stick with Tesla to finish the point.  First, Tesla has lobbyists.  Here they are.  Good people, no shame in that.  But pretending that Tesla is pure and the other side isn’t because they have lobbyists is a ridiculous argument, especially for readers of an inside baseball type of publication such as this.  Please do not ever cite “they have lobbyists” as an argument as if this is a one sided, unique occurrence.  It’s just dumb.

Then there’s the populist argument that’s pretty easy to make against car dealers.  They are industry that’s pretty unpopular.  Almost as unpopular as politicians.  But you know who likes auto dealers?  Politicians.  Why?  Because outside of metro Atlanta, most of them aren’t the corporate megadealers that you see all over Atlanta TV.  They’re local, independent businessmen.  They’re “good corporate citizens”.  They sponsor little league teams and anchor local United Way pledge drives.   And they employ people.  Perhaps most importantly, they generate tax revenue.  A lot of it.

They’ve also invested a lot into the current system.  As have brick and mortar retailers.  As have the owners of taxi cab medallions.  Those orchestrating the PR campaigns based on the fact that somehow asking new entrants into industries to compete on a level playing field are killing the “free market” want you to ignore that there’s already a market, with people that have made investment decisions based on the rules, operating in the current “free market”.

We should always look at ways to deregulate any market where it is feasible.  Of those mentioned above, the taxicab industry is perhaps the most ripe for that.  But this shouldn’t be done based on the manufactured perception that a new entrant into an industry is special, and deserves to “compete” based on rules that it only wants applied to itself.  That, quite frankly, is the opposite of the free market.  And in this case, that’s exactly what Tesla is asking for.  That, and for you to contact your representative for more incentives to buy their cars in a distribution channel only available to them.  In a “free” market.

Frankly, I’m not sure if the law requiring auto manufacturers to sell through independent dealers is still required.  There is an argument to be made that competition is actually increased under this model as the dealers must compete with each other on price and service if you want a Chevrolet, whereas there’s no negotiation with a Tesla.   Or, one could argue that it isn’t a proper state role to create this barrier to entry.

The fact remains, the auto market in Georgia has had this barrier for decades.  It’s how the market currently works.  And any change to that is a fundamental change to how a lot of Georgia businesses/employers operate, with a lot of deployed capital on the line.  As such, it deserves a serious debate.  Not a PR campaign that screams “free market” with no understanding of the term.

54 comments

  1. Somewhere, in an old moldy grave, the manufacturers of buggy whips agrees with you.

    Progress, Charlie. The very word frightens the hell out of Georgia Conservatives and entrenched business.

    I agree with your argument that “Free Market”, like so many other jingles hummed to the opiated masses, is really meaningless in reality.

    Mighty bold statement, sir!

  2. Ed says:

    Almost without fail, if partisans or vaguely ideological people believe something, there’s more to the story/they’re wrong. If they *passionately* believe something, then there is definitely more to the story/they’re wrong.

    I’ve seen a lot of Teslas, I almost don’t believe they’ve sold only 173. I’ve easily seen several dozen.

    • Posner says:

      It’s 173 in about 10-ish months. Not total. The permit is supposedly 150 per year. Tesla has been here a few years.

  3. Posner says:

    Perhaps a better phrase would be free (this) market. Because Tesla (and Uber, and other like startups) aren’t arguing to free “the” market, they just want to free the specific market where they are competing from government regulation which they view as unreasonable. More libertarians should probably take this sort of incremental approach–they would gain much more widespread acceptance by acknowledging that you can’t just eliminate all regulation (or gov’t) overnight, and that some areas are easier to deregulate faster than others.

    It should not be lost on anyone, ever, that most people who want to remove most government regulations (specific regulations, not regulations generally) want to do so out of self interest, not broader societal well-being. Welcome to capitalism, and econ 101, people act in their own self interest.

    Tesla isn’t saying all markets should be free, they are saying that gov’t regulations regarding automobile dealers don’t apply well to them. And they are probably correct. What’s perhaps more troubling is that auto dealers aren’t really worried about Tesla–they don’t compete against Tesla–they are worried about Chevy selling direct and cutting them out. So Tesla is really collateral damage in preserving their business model. As compared to Uber, who is a direct competitor to taxis.

    The broader hypocrisy here is in government handouts generally. For example, people who claim that Georgia is number 1 for business (because our economic development department redistributes hundreds of millions of dollars in taxpayer money to private corporations) but cry foul when entities they don’t like (the federal gov’t, chevy, GM) do the exact same thing.

    A government handout is a government handout. It’s neither per se bad or good, and it CERTAINLY isn’t bad or good based on whether you like it (“growing Georgia’s economy”) or don’t (“bailing out chevy’s bad business deals”).

    Finally, these issues aren’t really related. Handouts vs regulations are really separate (but related) issues. And it’s a non sequitur to talk about all of Tesla’s government handouts as a method of criticizing their position regarding government regulations.

    • Baker says:

      “For example, people who claim that Georgia is number 1 for business (because our economic development department redistributes hundreds of millions of dollars in taxpayer money to private corporations) but cry foul when entities they don’t like (the federal gov’t, chevy, GM) do the exact same thing.”

      Probably my biggest pet peeve with Republicans in Georgia (besides near blindness at some of Senor Deal’s, shall we say, less than transparent personal biz dealings).

    • griftdrift says:

      “Finally, these issues aren’t really related. Handouts vs regulations are really separate (but related) issues. And it’s a non sequitur to talk about all of Tesla’s government handouts as a method of criticizing their position regarding government regulations.”

      Not if you consider the capital investment aspect. As Charlie pointed out, they got relief on the capital and now also want relief on the regulatory practice. While their direct competitors in the market have neither advantage. They really want both sides of the cookie.

      • Posner says:

        “While their direct competitors in the market have neither advantage.”

        Their direct competitors aren’t automobile dealers. They are Chevy and GM (or really, BMW, Mercedes) who did receive massive capital infusions from government. Tesla is no different in that aspect than any other car company–every car factory built these days is built with massive tax breaks.

        But this fight is with the dealers. And that really has nothing to do with the capital “handouts” given by other gov’t agencies.

        Again, it’s important to remember that the dealers aren’t worried about Tesla taking their business, they are worried about Tesla showing Chevy and GM that selling direct is a viable business model and pursuing that model instead of the current one.

        • griftdrift says:

          That’s a fair point about the dealers real agenda. But the capital I’m talking about is what Charlie was talking about. Lots, buildings, etc.

          But actually I think the taxi medallion is a less confusing analogy. A medallion is a huge captial investment that has been a requirement for practically forever. Taxi companies (and their operators) have built their entire business model around this particular costs. Now Uber comes in a says we shouldn’t have to incorporate that in our model. They are suddenly have free capital that the taxi companies do not. That is certainly not a free market.

          • Posner says:

            “But the capital I’m talking about is what Charlie was talking about. Lots, buildings, etc.”

            But those are capital investments that Tesla has to make too if they want to sell in Georgia. Tesla has a showroom in Marietta and have plans for 3 more. The dealers aren’t getting shafted by Tesla somehow operating with less government mandated capital investment than them.

            “But actually I think the taxi medallion is a less confusing analogy”

            It’s not an analogy, it’s just a separate set of circumstances and issues. The only relation between Uber and Tesla (and AirBnB for that matter) are that they are new technologies taking on established business models.

            Now, as for the capital investment, a few points. First, arguing that someone invested a lot of capital into a certain way of doing business and thus we should “protect” them just isn’t a strong argument. It’s kind of the antitheses of capitalism–he who does it best (and cheapest) will win.

            Second, the only reason we’re even talking about capital investment is because it’s gov’t mandated capital investment. If, instead of a 100k permit (taxi medallion), we were talking 100 workers in a factory, and a new company came in and replaced 100 workers with 2 machines, nobody would be crying foul. That’s how business works–companies compete every day to lower their costs, and those with the lowest costs will be the most competitive.

            The fact that we’re talking about these “false” capital requirements ipso facto means the market isn’t free.

            “They are suddenly have free capital that the taxi companies do not. That is certainly not a free market.”

            They have discovered a way to remove a barrier to entry and be more competitive with lower capital costs. And you don’t mean “free market,” you mean “equal” market. You’re right, it’s not an “equal” market where everyone has to pay the same capital costs. But that’s the very nature of a free market–he who does it best (often meaning cheapest, often meaning lowest capital and variable costs) wins.

            • griftdrift says:

              I’m not saying we should protect them. I’m saying that we shouldn’t call allowing a direct competitor in the same market that is not required to invest capital that its competitor is forced to (in this case in the form of license) a free market.

              Uber’s costs are artificially lower because they currently are not required to pay to assure compliance. That’s capital they can invest into specific competitive advantages. Software development. Nicer cars. Free water bottles.

              That’s the government giving a competitive advantage just as surely as when they over-regulate a particular company is a competitive disadvantage.

              Look, I love Uber. They provide a fine premium service. And in certain circumstances can even beat the traditional taxi business model. Also, they are a disrupter to a long stagnant industry. Nothing is better for markets than a disruptive force.

              But, and its a Sir Mix-A-Lot but,

              There’s already incidents with Uber drivers. Anyone who thinks the public won’t eventually demand some form of regulation for Uber wakes to wet sheets after a night of dreaming of Galt’s Gulch.

              Instead of drawing a line in the sand on not regulating Uber, what should happen is we should have a discussion about what is reasonable regulation for both Uber and traditional taxis. (Something no one seemed to care about until Uber came along. Funny how people, especially “free market” zealots don’t care about regulation until it’s something they want)

              • Posner says:

                “Uber’s costs are artificially lower because they currently are not required to pay to assure compliance.”

                Umm, the taxi industry costs are artificially high, not the other way around.

                The bottom line is that when you involve the government in economic decisions, you get artificial (i.e. not market based) winners and losers. The taxi industry has been an artificial winner due to government granted monopolies for a long time. When your business model rests on a government granted monopoly, it’s inherently unsteady. The taxi industry is whining because they no longer have their artificial, government granted advantage.

                Also, consumer safety and “level” playing fields are separate issues. It’s one thing if we need to regulate Uber to protect the public (which feels way too big brother, personally), it’s totally separate if we “need” to regulate Uber because taxicabs are regulated and we need to even the playing field.

                Finally, “saving the public from danger” is a bit overblown as a legitimate source of regulation in this instance (it may be different where you have a more traditional tragedy of the commons, e.g. public health, etc.). If Uber is an unsafe method of transportation, the market will solve that problem–people will stop riding Uber. Nobody is forcing consumers to use Uber, if it turns out their insurance policies, driver screening, safety record, etc., are subpar, a competitor will come along and perform better and/or people will stop using Uber.

                • griftdrift says:

                  Taxi industry is artificially high and basically a monopoly and Uber is disrupting that which are all very good things. But there’s a big difference between saying the correction is giving Uber an unnecessary advantage and saying this is an opportunity to reform regulation on ALL ride sharing transportation.

                  As for the rest, I gave up my pass to Galts Gulch a long time ago.

                • John Konop says:

                  If a person sold insurance with a promise to pay and had no money in reserve you think this is ok because the market will correct it? If a car company promises a car is insured for repairs and has no money in reserve you think this is ok and the market will correct it?

  4. Baker says:

    “But pretending that Tesla is pure”
    “If you buy a Tesla in Georgia, the “free market” will give you $12,500 in income tax credits. You can take an additional $2,500 if you buy a charger for your business. ” (Geez is it still really that high?)

    I know Tesla has gotten a lot of tax breaks and I would argue vehemently against those if that’s what the issue at the moment was but we lost that argument years ago.

    “for you to contact your representative for more incentives to buy their cars in a distribution channel only available to them”

    I definitely don’t want it only available to them and I don’t think the other people supporting Tesla on this would either. If you make a product and you also have the time/money to spend on selling that product directly to a consumer, do it.

  5. FranInAtlanta says:

    There’s a part of me that dislikes automobile dealers but I have learned to work around them except for recalls – any recall usually costs me $$s because emergency “fixes” are “immediately needed.”

  6. gcp says:

    But there is such a thing as a “free market” but not when government and business combine against it. Adam Smith recognized this 250 years ago and it holds true today.

    Chuck Martin’s bill to eliminate the $5000 credit on the Nissan Leaf is a perfect example of business/government collusion. The Nissan dealers screamed and the bill went nowhere.

    As for Ga.

  7. NoTeabagging says:

    People forget certain businesses have regulations for consumer protection. We assume a car for hire or a commercial hotel will be safe. The Taxi industry is allegedly regulated and inspected so public has assurance they are riding in a safe, maintained vehicle driven by a licensed driver (although citizenship status may be questionable). Is Uber/Lyft fighting these consumer protections?
    Hotels also are regulated to assure visitors they are staying in a safe building, with accessible emergency exits and sanitary spaces and board of health inspected food venues. Is AirBNB fighting such standards for their landlords?

    I think the consumer protection issue has gotten lost in the mad rush for disruptive business models to have “free market” status. It only takes a few stupid people and needless deaths before consumers will cry for regulation again.

    Both industries can suffer from regulation abuse if your license approval/renewal is subject to greasing a few political palms. Are the start-up costs and license fees making it difficult, if not impossible, for small entrepreneurs to get in these businesses?

    I would love to know the rational, if any, for creating a “car dealer” retail venue that excludes manufacturers from selling direct. Was it created to offer competition from price fixing? Did it regulate sales tax and other taxes? Did it assure consumers they were getting a quality product? What else?

    • saltycracker says:

      There is a long multiple answer to your question, one insight from the past is the investment in a Hummer dealership, another it is a super risk as it swings on subsidies, another might be in state franchising laws if they sign a dud, another is the volume is so low it can’t stand alone or would not interest the typical dealer adding it to the line up……Will stop here….

    • saltycracker says:

      Sorry got in a hurry and responded on why Telsa would need to go direct. But dealers wouldn’t like a precedent, if it is a hit ! They can go with a company owned dealership I’d think, but maybe they have the same thoughts I mentioned….setting up local places would really need subsidies !

    • JackB125 says:

      The state automobile franchise laws are what is called an “economic rent”. An economic rent is some type of barrier or restriction that limits competition in an otherwise free market. The opposite of an economic rent is unfettered, completely free competition. Not all economic rents are bad. Patents for example, providing protection for a limited time only, allow businesses to recoup R&D expenses as well as make a profit that would often not be possible if completely free competition were allowed immediately upon a products’ release.

      The automobile franchise laws originally made sense. They protected dealerships that were enticed by automobile manufacturers to make large investments in facilities, inventory, and people specifically for the sale of the manufacturers’ products. It would have been unfair to allow the manufacturers to immediately follow-up after these investments were made and try to undercut the new dealerships that were created at the manufacturers’ behest.

      But like patents, this protection should not be extended forever. And, they never should have been applied to automobile manufacturers that never engaged in the enticement of an independent dealership. That is completely outside of the original intent of the franchise laws.

      Unfortunately, the current state and national dealership associations are trying to do just that with Tesla Motors. Furthermore, they believe that their franchise protection should be perpetual. They never want to be forced to face truly free competition. This is completely understandable – it’s in their self-interest. However, it is a terrible economic policy.

      With the current franchise laws, we have seen a rash of dissatisfied customers that complain bitterly of both their sales and service experiences. We also have evidence that the current structure, in general, adds significant costs to automobile purchases. See the U.S. Department of Justice Study “Economic Effects of State Ban on Direct Manufacturer Sales to Car Buyers” at http://www.justice.gov/atr/public/eag/246374.htm
      .
      I don’t believe that all franchise dealerships are bad. In fact, I believe that many dealerships add real value to the purchase process as well as maintenance and service. The many very successful dealerships that are currently providing this true value have already established good relationships with loyal customers and will continue to succeed with or without the franchise laws. They are competitive now, and will continue to be competitive in a free market.

      So, who truly benefits from the current franchise laws? Obviously, it is only the dealerships that would provide an inferior service in a competitive market. Does it make any sense at all to hobble new businesses for the sake of second-rate dealerships? Of course not.

      The franchise laws are long overdue for repeal. Any state legislature that doesn’t see this is in the thrall of the dealership lobbyists.

      • saltycracker says:

        Really ? Eliminate the state franchise laws and run with the manufacturers franchise agreements or eliminate both and operate one of the biggest industries on a handshake ?
        In that jungle, the customer is the raw meat.

  8. HueyMahl says:

    Charlie, Charlie, Charlie. Bless your heart. Change really does scare you, doesn’t it?

    For all the reasons listed above by some great posters (and I really mean it, the posts on this topic have been excellent), there is no contradiction here. Maybe in your conservative heart you can’t reconcile reducing regulations that help the good-ole-boy network, but that is exactly what needs to be done. The auto-dealer oligopoly being protected by the state needs to be broken up. Same with the taxi industry, same with every other industry that has rules preventing competitors from entering.

    And this is not about consumer protection. That argument is the ultimate red herring. It is all about protecting entrenched business interests from competition, and any right-thinking person should be against that.

    • NoTeabagging says:

      Totally agree with changing the restrictions that keep the select few, and well-connected, in business. However these young’uns gotta realize its not better just because you can order service on your smartphone/tablet/whatever without ever speaking to a live person.

  9. saltycracker says:

    This is a topic of great interest, a lot to comment on and little time having spent years in this relationship of manufacturers, distributors, large buyers and retail customers. This is not a pure free market vs. Over regulated or over legislated process. All parties play an important role, expend tremendous effort to bend the rules their way and each has somewhere one revails to the detriment of all. It’s a jungle and extinction is not good.

    The auto dealers have a bit of an edge when protected by legislation where the manufacturer can’t replace a bad one or maintain uniform standards across states to insure the consumer is treated fairly. The manufacturer tries for an edge to control the supply line of components. The workers have an edge in non-right to work states, the exports have an edge without legacy costs or components made under different regs and low tariffs, a global industry make a for a lot of accounting and manufacturing “opportunities”.

    The competitive and regulatory market has driven quality to unbelievable levels of a few decades ago.
    The good dealers work with their manufacturer’s customer promotions in in sales, parts and service values so that you won’t see a wild swing from town to town or a “strange” place. The bad dealers live in the past of gouging the not so knowledgeable and their manufacturers warranty and sitting on market areas jacking up prices and getting poor market share for the brand.

    For electric cars, the government should stick to research, like batteries and not involve themselves at the consumer level with one off rebates, cash for clunkers and other promotions costing
    the taxpayer billions, reward a few when they could benefit the process in battery life, emissions, fuel economy…..Telsa is for a very few that buy a luxury feel good and hardly need a taxpayer handout, better spent on research….helping Telsa and everyone else pushing an electric car. Selective handouts are not in our best interest.

    The answer is in a reasonably regulated free market…..easy to say, very difficult to pull off.

    • saltycracker says:

      Jumping to Uber, this is an example of bureaucracy gone mad. What is needed is not a sealed contained medallion system but a reasonably regulated – safe for consumers – business license/inspection/insured process that costs allow competition.

      • Harry says:

        Key concept: Reasonable regulation, seek to lower barriers to entry where possible. We also need to rework patent and copyright law etc.

    • saltycracker says:

      A better word than reasonably regulated “free” market would be reasonably regulated “competitive” market.

    • Dave Bearse says:

      “The workers have an edge in non-right to work states….” The other side of the coin / alternate spin is that the employers have an edge in right to work states.

  10. objective says:

    free markets are better thought of as a hypothetical model to be used for comparative purposes, not a reality.
    perhaps the car dealer regulation has justification in the prevention of a vertical monopoly, where the manufacturer cannot also be the retailer. that does encourage some economic diversity (in terms of ownership), but simultaneously raises costs and consumer prices.
    the trick, imo, with any regulation designed to address market failures, incl consumer safety gaps, is to create the barrier as a minimalist. it shouldn’t be a barrier that a new entrant can’t get over. like how the warped wall in american ninja warrior is too much of a barrier if you’re short. if there’s a wall, make a rope for climbers to get over it if they’re driven. gov’t loans are a possibly effective rope in some cases. temporary or partial exemptions are another. or just really low walls.
    but charlie’s on point- we need discussions on realities, not free market fantasies.

  11. Good discussion going on here.

    I cosponsored a bill by Chuck Martin during the last session to increase the number of cars Tesla could sell to 1500 per year. I hope Chuck introduces that bill again this year because the debate needs to continue.

    That being said, Charlie is correct when he says we need to be aware that auto dealers have made substantial investments and we should proceed with caution when talking about changing these types of laws. The same is true when talking about folks who own taxi medallions in Atlanta.

    I’m a big fan of innovative companies like Uber and Tesla. And yes, I’ve done some driving for Uber to make a few extra bucks so my bias is known. I hope we can find a way to allow these destructive innovators to continue innovating without smashing those who have played by the rules under the current systems. But, if accommodations can’t be made, I’ll side with the destructive innovators.

    • gcp says:

      What’s the status on Martin’s bill from last session to dump the ridiculous $5000 tax credit on the Nissan Leaf? Will he reintroduce it in 2015 session?

    • saltycracker says:

      Buzz
      Big difference from clearing the path of bureaucracy for Uber and SPENDING tens of millions for one company to provide cars to someone that uses more energy than a South Georgia city. But you are the government and here to help…..?

      • The state of Georgia doesn’t give any money to Tesla. We do give millions to drivers of the Nissan Leaf and if you’ll check my voting record you’ll see I supported Martin’s bill to curtail it. It passed the House last session but died across the hall.

        While I may not like the federal dollars that have flowed into Tesla, I think they have the right to sell more than 150 vehicles per year in Georgia.

        • Charlie says:

          Unless I’m mistaken, the buyer of a Tesla gets the same $5,000 state tax credit as does the buyer of a Nissan Leaf. That’s where the total $12,500 incentive from Tesla’s website comes from. $7,500 of our federal tax dollars and $5,000 from State of Georgia.

        • saltycracker says:

          150 to 1500 is an increase in the subsidies x10.
          How about for every electric car you buy GA will apply up to $5,000 of your state tax directly to the DOT budget.

          • saltycracker says:

            Addendum: maybe some split of the $5k between DOT and local tech school for a training class (which mfg would probably participate in)

        • gcp says:

          Buzz Brockway

          I can pretty well guess who killed it in the senate but my question is will Martin’s bill be reintroduced this session?

  12. seenbetrdayz says:

    I’m totally fine with ending the subsidies. That really seems to be the core of the problem and therefore . . .

    it will never be presented as an option.

  13. saltycracker says:

    The “me firsts” might not get served. Public money could be used in developing technology and lowering costs with the govt retaining the patents and licensing them out on differing scales.

  14. Dave Bearse says:

    I was among those citing (1) Auto Dealers are greedy and thus should be punished and (2) Auto Dealers have lobbyists, in a comment in the previous thread, but didn’t weigh in on Tesla because I lacked information. Great post providing background, Charlie.

  15. MattMD says:

    Haha, if anybody thinks we operate in a true “free market” then they are just fools. You could say we have a “more free” market but it is far from a true market-based economy.

  16. As usual, most of you are totally missing the meta and focused on profit and losses. I should not have to point out that when it comes to profits vs people, people should prevail. Anyone who thinks otherwise is subconsciously prioritizing the rights of dry corporations over that of water bag humans.

    Nor should I point out that we all desperately need (I so rarely use the word need, so pay attention) to address the dependence on gasoline for transportation. Giving a tax break to someone who parks their diesel 4 wheeler and drives an e-car is a GOOD use of a tax break because it is an investment in clean air.

    Sometimes I wonder if we should just split the government in two: one for The People and one for The Corporations. And when the two laws clash The People prevail. Why? Because corporations can not exist without people, but people can sure exist without corporations!

    Conversely, who among us has a passionate love for a car salesman? So let’s see….hmmm…. what is best for the children here?

    • seenbetrdayz says:

      Just be careful that at some point a ‘tax break’ is no longer a break rather than being paid to do something, or, to use a word many here don’t like, a ‘subsidy.’

      If I’m expecting to pay $500 in taxes and I get a $1,000 tax credit, then that’s a bit more than a break. I’m actually being paid to do something. That money has to come from someone else, because the most of my own money they can possibly give back to me is $500.

      Discounts are one thing, payouts are another entirely.

  17. TBro says:

    Great piece, Charlie. Despite working in the automotive industry with many dealers, I have been holding to the opinion that Tesla is somehow a victim in all of this, ganged up upon by dealer associations in various states (and now Georgia). In reality, your piece shows that Tesla is the beneficiary of all kinds of “special” treatment, in ways I did not fully realize. So yes, we may not be dealing with a “free market” here like we thought. Thank you for that bit of enlightenment on a Wed afternoon.

    That said, even if we have a company in Tesla using the “green card” to secure everything from low-interest government loans to lower energy bills for their customers, who really can blame them? They are up against huge odds, trying to become the first successful new automaker in the US since the Kaiser-Frazer Motor Company of the post-WWII era. If nothing else, I find it fascinating to watch 🙂

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