Remember - It's Tesla vs Dealerships

Another state has effectively banned Tesla sales - Michigan. From a public choice perspective it's not surprising that the homebase of the old auto manufacturers is moving against their upstart electric competitor. Creative destruction is always opposed by those who are hurt by changes in the status quo. But people looking at the newest twist in the story from the angle of "Big Three vs Tesla" are missing a key point:

Old school auto manufacturers have been held hostage to dealerships for decades. Laws originally designed to protect large capital investments of dealerships have been extended indefinitely. None of the auto manufacturers are allowed to sell directly into states themselves - politically influential dealerships have locked automanufacturers into a disadventagous long term relationships via dealer franchise laws.

When Tesla was let into New York, it wasn't a compromise with the Big Three that got them a spot at the table - the deal that let Tesla keep their retail outlets also helped the dealerships in their relationships with out-of-state manufacturers. 

This doesn't make the strategy of the Big Three in Michigan and elsewhere right. But from their perspective they are just trying to ensure that their new competitor has to deal with the same parasites that they are forced to do business with. This may entitle them to sympathy, but it does not mean they deserve any support in their misguided quest to expand the reach of their rent seeking dealership partners.

Tesla's real enemy has always been the car dealerships and their lobbyists. And in the battle of corporations vs. rent seekers, consumers win when rent seekers lose. 

Side note: Dealerships are often portrayed as small businesses that help drive economic growth. This is because small businesses are seen as engines of job growth. This is wrong - the actual causation is that young firms are drivers of job growth and the correlation between size and job growth exists because many young firms just happen to be small.  Dealerships are generally old businesses.