The highest court in Massachusetts has ruled that Tesla should be able to sell its electric cars directly to consumers like you and me. That's a big win for billionaire entrepreneur Elon Musk, who's been waging a multi-state battle for the right to sell the vehicles — and make their technology more commonplace. But the ruling also highlights a growing divide between states, one that will tell us a lot more about the value of electric vehicle technology in the years to come and its potential to change how we travel, how we use energy and even how we design our future cities.
What we're seeing in the Massachusetts ruling is the makings of a natural economic experiment. On the one hand you have states like New Jersey, Arizona and Texas that effectively prohibit Tesla from making any inroads with consumers. On the other you have states like Massachusetts that have shown a willingness to experiment.
The reason this is significant is because electric vehicles require a whole separate kind of supportive infrastructure. Without a network of special charging stations to rapidly refuel the cars, electric vehicles would have a lot of trouble competing with traditional cars that run on gasoline. To that end, Tesla recently opened up its patents to encourage other car manufacturers to design electric vehicle technology. The hope is that greater investments will help bring down the cost of electric vehicles (Tesla's newest vehicle is expected to be within ordinary consumers' grasp, at $35,000) and spread the sort of infrastructure that they need to be competitive.
In states with more Teslas on the road, it's reasonable to think that this infrastructure would be more robust. And if other manufacturers detect a market opportunity in these areas — either by piggybacking off of Tesla's charging stations or by building their own — it won't be merely Musk that benefits, but also states — who stand to gain from the follow-on economic activity — and consumers who will be served by the added competition. The Federal Trade Commission made more or less this argument in April when it said that state laws banning direct sales of Teslas were "protectionist."
"American consumers and businesses benefit from a dynamic and diverse economy where new technologies and business models can and have disrupted stable and stagnant industries," wrote the FTC in a blog post. "Consumers can benefit from change that also challenges longstanding competitors."
Presuming that states like New Jersey and Arizona continue blocking Tesla, and that states like Massachusetts continue with their different course, it'll be interesting to check back in five years (or maybe less) to see how either policy has changed the states' economies.