Wednesday, March 18, 2015

Musk and Tesla

Mention Elon Musk or Tesla, and a myriad of responses are given. Regardless of the responses, the fact is that Musk is attempting to shake up the auto industry. This article from the Daily Bell titled, "Tesla's Musk Continues to Restyle Himself as a Tech Visionary. But Why" is an example of this.

Many states are attempting to ban the sale of Tesla autos in their state. Some states have been successful, as New Jersey comes to mind. This is not because of the fact the cars are electric, but because the cars are sold directly from the manufactures. This is smart by Mr. Musk because the cost of building an electric auto will be higher than its combustion engine equivalent. In an attempt to cut down on costs, selling the car directly from the manufacture is a brilliant move. However, the auto dealers association is lobbying to push for enforcement of the rule of not allowing Tesla to sell cars in those markets. Now, in New Jersey, the current Governor Chris Christie is pondering if Tesla can be allowed to be sold in New Jersey. Read up on this here from this article titled, "Chris Christie will decide if Tesla can sell directly to consumers in New Jersey" 

All of these developments demonstrate how this is quite intriguing, as we Americans pride ourselves in "Free Enterprise".  In a market where buyers and sellers are free to exchange goods and services, it is very efficient--provided that there are no cost, hurdles or barriers of entry(e.g Regulations, increased taxes, fees, etc) that are imposed by the Government. How does Governor Chris Christie know what all the consumers prefer? How does anyone know this? No human can. If the Governor is determining the fate of Tesla, and not the consumers, can we honestly state this is "Free Enterprise"? 

The most effective way to determine if Tesla is a viable auto maker is this:  Allow them to sell their vehicles in the marketplace, and allow the competition with other auto makers to determine the winner. In this situation, the consumer, drives the preference; as it will not be determined by the Governor. 

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