Auto dealers and the future of EVs

Your reminder that car dealers, state protected middlemen who are a major net negative to consumers as currently constituted, are one of the most powerful reactionary forces in the country:

Really, the past hundred years had been great. Auto dealers are one of the five most common professions among the top 0.1 percent of American earners. Car dealers, gas station owners, and building contractors, it turns out, make up the majority of the country’s 140,000 Americans who earn more than $1.58 million per year.* Crunching numbers from the U.S. Census Bureau, data scientist and author Seth Stephens-Davidowitz found that over 20 percent of car dealerships in the U.S. have an owner banking more than $1.5 million per year.

And car dealers are not only one of the richest demographics in the United States. They’re also one of the most organized political factions—a conservative imperium giving millions of dollars to politicians at local, state, and national levels. They lobby through NADA, the organization staging the weekend’s festivities, and donate to Republicans at a rate of 6-to-1. Through those efforts, they’ve managed to write and rewrite laws to protect dealers and sponsor sympathetic politicians in all 50 states. All of which meant that this year, presidential hopeful Nikki Haley and Fox News darling Greg Gutfeld, among others, had made the pilgrimage to kiss the key ring.

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By the time car salesmen had won their reputation as the very least scrupulous of business practitioners, dealers had secured such an astounding array of political protections via their lobbying outfit that no countervailing force—economists, car manufacturers, civil rights groups, environmentalists, or the Koch brothers—has been able to thwart them. A survey done in 2016 by one of their own trade publications found that 87 percent of Americans disliked the experience of buying a car at a dealership. So what? You don’t have to be well liked if you’re powerful.

Now car dealers are one of the most important secular forces in American conservatism, having taken a huge swath of the political system hostage. They spent a record $7 million on federal lobbying in 2022, far more than the National Rifle Association, and $25 million in 2020 just on federal elections, mostly to Republicans. The NADA PAC kicked in another $5 million. That’s a small percentage of the operation: Dealers mainline money to state- and local-level GOPs as well. They often play an outsize role in communities, buying up local ad space, sponsoring local sports teams, and strengthening a social network that can be very useful to political campaigns. “There’s a dealer in every district, which is why their power is so diffuse. They’re not concentrated in any one place; they’re spread out everywhere, all over the country,” Crane said. Although dealers are maligned as parasites, their relationship to the GOP is pure symbiosis: Republicans need their money and networks, and dealers need politicians to protect them from repealing the laws that keep the money coming in.

Allowing auto manufacturers to sell directly to consumers should be an absolute no-brainer for Democratic-controlled states — good policy in itself, and reducing the windfall profits on a major Republican interest group is icing on the cake.

There’s another reason to do this:

So there it was: Dealers stand between many electric cars and most American car buyers, but they aren’t just going to lay down and let some zero-emissions playthings roll them over. Some, I heard over and over, would rather not deal than deal with someone else’s dictates.

Never mind that the Environmental Protection Agency was preparing regulation such that two-thirds of all new cars sold by 2032 would be all-electric. Never mind that the Federal Trade Commission had singled out the industry for a crackdown. Dealers had stared down the government before and were making more money than ever. They took hostages—they did not become them. They would self-sabotage if they had to. A recent Sierra Club survey would find that two-thirds of car dealerships did not currently have an EV for sale; almost half of those dealers said they were refusing to offer them. They had 100 years of practice and accumulated power, all leading to this moment. Dealers have the best diesel-powered federal advocacy in the country—and Republican foot soldiers hard at work to ensure that the future will not come.

The transition to a much more electrified auto fleet will be much easier if Democratic controlled states don’t allow a monopoly on auto sales to obstruct it. This is pretty much the only way in which Elon Musk can still be a force for good (although it says something about how brain-poisoned he is by MAGA propaganda that he moved his company to a state where his sales model is illegal.)