Monday, March 24, 2014

Tesla the Beneficiary of Crony Laws

Yesterday I highlighted the assault on Tesla by state laws requiring it (and other auto manufacturers) to sell its cars only through franchised dealers. These laws are textbook cases of what is popularly called "crony capitalism," but which in fact has nothing to do with capitalism. It is more accurately called crony socialism.

Today, I highlight Tesla as the guilty party. It supports and is supported by an array of taxpayer-funded federal and state loans, subsidies, and credits.

As Christopher Koopman writes in U.S. News and World Report, Tesla's very profitability rests on cronyism. Koopman writes:

Tesla's success is ultimately a case study in the perils of government-granted privilege, its financial success demonstrating a reliance on political favoritism more than an ability to create value for customers. Tesla Motors would not have been created were it not for the generosity of politicians – if generosity is the right term for spending taxpayers' money.

To round out the complete story of Tesla, read Koopman's entire article, Tesla is No Success Story.

Related Reading:

Tesla Battles Crony Laws Banning Direct Manufacturer-to-Consumer Car Sales

"Regulating" Business - the Good and the Bad

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