*This article was contributed by Chad Huber, a technologist who works out of TechArtista in the Central West End
If you manufacture a product here in the United States, one would think you would be allowed to sell that product directly to your customers. This is a free country and our free-market beliefs dictate this to be true. If you are a manufacturer of automobiles, that would not have been the case if a proposed Missouri bill had become law.
HB 1124 was introduced in December of 2013 as a bill to regulate off-road and all-terrain vehicles. Just before a crucial Senate vote, (which passed the bill and sent it to the House) new language was added that included tighter regulations on manufacturers of automobiles. The new language would have made it illegal for manufacturers to sell their vehicles via their own stores in the state of Missouri.
This is very troubling. Missouri is a pro-business state and an advocate for the free-market economy.
Consumers should have the choice to purchase their products and services through a third-party or
directly from the manufacturer. This bill was aimed directly at preventing Tesla, an American manufacturer of electric vehicles, from opening stores here in Missouri. (Cultivation Capital’s Brian Matthews is not only a Tesla enthusiast, but a Tesla owner)
Tesla would have been in a bind because it would have been nearly impossible to sell its vehicles via the dealership network. The technicians at the dealership service centers do not know how to properly maintain or service an electric vehicle, which, as you can imagine, is drastically different than a vehicle with an internal combustion engine.
That is why Tesla invested $2M in St Louis to open a Tesla owned and trained Service Center and
plans to open one in Kansas City later this year, investing another $1M. That is $3M worth of investments into Missouri just to service its 150 Model S customers that live here. A dedication customers is something that dealerships have seemed to forgotten in recent years.
The big auto dealership network has created an oligarchy and its members are doing everything they can to
protect their market from new entrants. This unrelenting grip on the market has allowed the dealerships to implement anti-consumer practices such as non-transparent pricing, questionable sales tactics and unreasonable markups for servicing a vehicle. Tesla provides a fresh approach to purchasing a vehicle, which will introduce options for consumers in Missouri. This competition will force the dealers to be more consumer friendly and treat its customers with dignity.
There has not been a successful car startup in America since Chrysler was founded in 1925, and not for lack of effort. Delorean, Tucker and Fisker are just a few that tried and failed. Their downfalls were, in part, due to a stranglehold on the market, tight regulation and market protections passed by incumbents. (and in Delorean’s case, lots of cocaine & 1.21 Gigawatts)Tesla realized it needed to do things different to survive, such as avoiding selling via dealerships. Selling directly to consumers should be a right afforded to all businesses.
The bill has been declared dead, and Tesla will be able to enter Missouri’s market.