Tesla, Dealer Franchise Laws, and the Politics of Crony Capitalism

43 Pages Posted: 19 Feb 2015

See all articles by Daniel A. Crane

Daniel A. Crane

University of Michigan Law School

Date Written: February 1, 2015

Abstract

Tesla Motors is fighting the car dealers' lobby, aided and abetted by the legacy Detroit manufacturers, on a state by state basis for the right to distribute its innovative electrical automobiles directly to consumers. The Tesla wars showcase the important relationship between product innovation and innovation in distribution methods. Incumbent technologies may block competition by new technologies by creating legal barriers to innovative distribution methods necessary to secure market acceptance of the new technologies. While judicial review of such special interest capture is generally weak in the post-Lochner era, the Tesla wars are creating new alliances in the political struggle against crony capitalism that could contribute to a significant re-telling of the conventional public choice story.

Keywords: regulation, distribution, public choice, tesla, innovation, automobiles

JEL Classification: K1, K2

Suggested Citation

Crane, Daniel A., Tesla, Dealer Franchise Laws, and the Politics of Crony Capitalism (February 1, 2015). Iowa Law Review, Forthcoming; U of Michigan Law & Econ Research Paper No. 15-009. Available at SSRN: https://ssrn.com/abstract=2566436

Daniel A. Crane (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-615-2622 (Phone)

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