January 21, 2021

Musk

Rahm Emanuel, the former mayor of Chicago, is rumoured to be president-elect Joe Biden’s pick for Secretary of Transportation, according to a new report from Axios. But Emanuel would be a very weird choice for the position, not only because the longtime political operative has quite a list of political scandals. One of Emanuel’s few “accomplishments” in the area of transportation was hosting a press conference with billionaire Elon Musk to announce a futuristic-sounding project of underground tunnels that never happened.

“It will take longer to get through security at O’Hare than to get to O’Hare,” Mayor Rahm Emanuel proudly declared on June 14, 2018 during a press conference with Elon Musk at his side.

That promise hinged on Musk’s plan to install an underground “Loop” transportation system in Chicago between O’Hare Airport and downtown that was supposed to use 16-passenger vehicles travelling over 161 km per hour in tunnels underground.

The press conference was quite a spectacle, with Emanuel hosting Musk and proudly announcing the billionaire founder of SpaceX would be bringing futuristic transportation options to the Windy City through Musk’s tunnel-digging corporation, the Boring Company. And Musk even promised to start work quickly.

“We expect to start drilling later this year, perhaps as soon as three or four months,” Musk said. “And we’ll start drilling from both the station side and the airport side.”

Again, that was in June of 2018. Musk planned to make the project happen through private investment, insisting behind the scenes that the entire thing might cost just $US1 ($1) billion. The Boring Company said riders would pay between $US20 ($27)-$US25 ($34) per ride, roughly half the cost of an Uber for the roughly 29 km to the airport, and taxpayers wouldn’t have to put up a single penny.

Admittedly, it looked pretty impressive on paper, including a rendering of what a Loop station in downtown Chicago was supposed to look like, as well as an animated concept video of the vehicles in action.

Image: The Boring CompanyImage: The Boring Company

Those 16-passenger vehicles were supposed to be completely autonomous, electric, and utilise a new unexplained technology to “skate” along an underground track. The Boring Company even bragged on its website that vehicles “will leave each station as frequently as every 30 seconds,” and claimed the system would operate “20 hours per day, every day of the week.” The Boring Company has since deleted the Chicago project from its website.

The animated video of Musk’s vehicles looked like something out of Tron with neon-blue light and a comfortable descent into an underground world of futuristic bliss. Storytellers of the 1950s, the same people who promised flying cars and jetpacks, would’ve been very proud, if only because Musk didn’t deliver on his techno-utopian promise either.

As you might recall, Musk’s promises of a revolutionary technology quickly disintegrated later in 2018. The Boring Company built a short tunnel in Los Angeles for a public demonstration that was embarrassingly pathetic. Musk assembled the press in December to show off his

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  • Tesla is the only major automaker doing business in the US that sells vehicles directly to consumers, avoiding the franchise-dealership model that has been around for a century.
  • Tesla can’t sell directly to consumers in every state in the US, but it has waged a battle for much of the past decade to change laws that govern the dealership system.
  • The company has gone from selling less than 20,000 vehicles in the US in 2014 to delivering almost 200,000 in 2019 — all without dealerships.
  • Tesla is also more valuable at $400-billion in market capitalization than GM, Ford, and FCA combined.
  • Visit Business Insider’s homepage for more stories.

Tesla is infamous for not having traditional car dealerships in America. Instead, the company sells vehicles directly to its customers — but only in US states that permit it to do so. 

All other major automakers doing business in the US, by contrast, sell vehicles on a wholesale basis to their car dealerships (in some cases financing those purchases), and the dealers sell to the retail consumer.

State franchise laws empower individual dealerships to operate this way. Auto sales have followed this model since before World War II, when lawmakers decided that it would be unfair for manufacturers to compete with their dealers.

Over the decades, dealers have defended this arrangement through state legislatures, and today, Tesla is the only automaker that doesn’t have to go the franchise-dealer route.

But Tesla still doesn’t sell directly everywhere. It’s outright banned from selling to customers in 10 states, free to do its thing in 12, with eight states allowing a limited number of locations to do direct sales. In the states where Tesla can do limited direct sales and those where it’s essentially free to pursue its own model, there’s been a mixture of legislation and court cases since 2013 to determine what the company can and can’t do.

Some critics thought that Tesla would have to give in to the franchise model to keep growing its sales, but thus far, it hasn’t — and that hasn’t undermined the company’s business. Tesla has gone from selling about 16,000 vehicles in the US in 2014 to nearly 200,000 in 2019. At the same time, the young automaker has minted a market capitalization, at over $400 billion, that makes it the world’s most valuable automaker, worth more than ten times Ford.

So Tesla hasn’t needed dealers. Here are ten times when the company and CEO Elon Musk proved it:

1. When the Model S won Motor Trend’s Car of the Year in 2013.

Tesla Model S

The Tesla Model S.

REUTERS/Noah Berger


Tesla was selling fewer than 20,000 vehicles per year in the US when it debuted the Model S sedan in 2012. The Model S was Tesla’s first “clean sheet” design, created in-house, versus the original Roadster, which has a Tesla drivetrain from a chassis derived from a Lotus sports car. 

Stunningly, the Model S captured Motor Trend magazine’s prestigious Car of the Year award for 2013. “It

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