Dealers Gear Up To Fund GOP Presidential Candidates, But Will Tesla Supporters Lose Out?

April 6, 2015

It's no surprise that U.S. auto dealers and dealer networks skew heavily Republican. The GOP has built a reputation as being pro-business and anti-regulation -- stances that appeal to many in the business community.

According to Auto News, though, the 2016 election cycle could be a confusing one for the auto industry. That's because, although dealers and dealer networks tend to prefer rolling back government oversight, they want to maintain the status quo in one key area: franchise laws. Many candidates and much of the U.S. population, however, see things differently thanks to the growing popularity of Tesla.

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During the 2012 federal elections, America's dealers spent more than twice as much on Republican candidates than they did on their Democratic rivals. The National Automobile Dealers Association, for example, ponied up $3.2 million, all of which went directly into the coffers of candidates or political parties. While 28.90 percent of that money went to Democrats, the remaining 71.10 was spent on Republicans.

Among the remaining top-ten dealership spenders, six gave nothing to Democrats at all. The other three did, but that spending topped out at AutoTrader, which only gave seven percent to candidates in blue.

So, given the fact that the GOP race is slowly ramping up, you might think that dealers would be preparing to toss money left and right at folks on the Right. But that's not entirely the case.

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By all accounts, 2016 is going to be a contentious race for GOP candidates. There's no clear front-runner yet, and technically speaking, only one major player -- Ted Cruz -- has announced his candidacy. However, everyone knows that Cruz will be joined by a host of others, including some very, very familiar faces.

Businesspeople like Jim Click at Tuttle-Click Automotive Group are eager to get in on the action early. Click in particular is chomping at the bit to raise money for Jeb Bush's "Right to Rise" super PAC.

Another heavy-hitter, David Wilson of David Wilson Automotive Group, is more cautious. He's interested to see how the pack of candidates takes shape in the run-up to the primaries.

Wilson is also worried about Tesla -- less as an automaker than as a political force that could upend decades of tradition in car sales. Specifically, Wilson is concerned about Tesla's ability to open direct-sale showrooms in states with strong franchise laws. Though Tesla is still very much a "niche" automaker, if it gains enough ground, the company's wins could encourage larger automakers to challenge franchise laws. And that, in turn, could put a massive dent in dealership sales.

Complicating matters is the fact that Tesla is seen as an underdog and an innovator that's being stymied by outdated laws. Many Americans already hate car dealers, and they want auto shopping to be as simple as a trip to or the Apple store. Tesla's growing brand popularity -- and dealerships' increasingly loud criticisms of the company -- have swayed public opinion to Tesla's side.

That puts Republican politicians in a bind. They like innovation, they like the idea of smaller government, many like the idea of nixing or loosening franchise laws, so by all rights, they should be rabid supporters of Tesla. Except they know that making such a stand will cost funding from dealers and dealer networks.

One early casualty on this front may be Florida Senator Marco Rubio, who recently expressed strong support for Tesla's direct-sales model. Wilson has made it clear that he probably won't be supporting Rubio, and Governor Chris Christie could find himself in the same boat.

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Despite all the hemming and hawing around Tesla and franchise laws, it's highly, highly unlikely that dealers will sit this election out. It's also unlikely that they'll switch to support Democratic candidates in droves.

What's more likely to happen is that candidates will dial down their rhetoric a bit so that they're not committed firmly to one position or the other. (This works for both parties, BTW.) That may be enough to convince some dealers to give directly to candidates. For those that aren't swayed, Citizens United and other court cases have given them the right to donate to issue-related PACs all they like.


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