One of the sharpest brickbats too often tossed at Tesla Motors Inc. by free marketers and innumerable commenters on investment forums is that Chairman and CEO Elon Musk’s crusade to build mass-market electric vehicles is just another exercise in crony capitalism.

The numbers tell a different story.

The economic purity test applied to Tesla is all the more remarkable for Musk’s heroic efforts to dismantle dealer franchise protections at the state level. These laws are about as anti-consumer in nature as anyone can imagine. Ignoring Musk’s role in breaking the stranglehold of the powerful and indisputably crony dealer lobby is unconscionable.

According to Daniel Crane, an anti-trust expert at the University of Michigan Law School, franchise laws designed to shield dealers from competition are “emblematic of a broader problem of economic regulation and frail legal response – the lack of robust legal tools for the courts to tackle protectionist or otherwise anti-consumer regulations designed solely to benefit concentrated economic interests.”

“Across the country, the car dealers’ lobby – often with the support of the legacy car companies – has invoked either the old dealer laws or obtained legislative extensions of them to block Tesla’s progress,” Crane observes. “Tesla is fighting a multi-state, multi-front battle in state legislatures, regulatory commissions, and courts just for the right to distribute and service its products.”

This is not to say that the “everyone’s doing it” argument justifies corporatism or crony capitalism. As a staunch believer in the power of markets to create wealth without government interference, I view crony capitalism as one of our country’s biggest problems. But the serial entrepreneur Musk and his Tesla experiment deserve much more credit for upending the business as usual mentality of domestic automakers.

With fellow researcher J.R. Clark, the Probasco chair of free enterprise at The University of Tennessee at Chattanooga, I’ve put together some numbers to answer the question: Is Tesla a force for innovation and mass-market success, or is it simply living off of taxpayer handouts? Tesla critics cite government loans, environmental credits and tax incentives as proof of cronyism, so I will respond to each in turn.

For starters, there’s the loan that Mitt Romney and others criticized as either a $450-million bailout or handout. As a result of a Department of Energy program to encourage production of fuel-efficient vehicles, the government in 2010 disbursed loans of $5.9 billion to Ford, $1.4 billion to Nissan, $529 million to Fisker, and $465 million to Tesla at low interest rates.

We know that Fisker defaulted on $139 million of the loan. Nissan just repaid its loan, and Ford plans to pay off its loan by 2022. Meanwhile, Tesla fully repaid the loan with $20 million in interest, nine years early.

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Tesla also sells electric vehicle credits to other auto companies, since manufacturers are mandated to sell a certain number of electric cars or buy permits from manufacturers who do. Tesla made what amounts to 6.3 percent of their revenue from these programs. It’s fair to call this a subsidy, but not a massive one.

Then there’s the vehicle tax incentives, often described as “subsidies.” Since 2009, the federal government has offered electric car buyers a $7,500 credit they can use to reduce their taxes by up to that amount. This credit is not refundable, so it can only reduce a taxpayer’s bill. Yes, the policy gives preferential tax treatment to buyers of electric cars. But it’s not a cash handout. Moreover, the program is phased out once a manufacturer produces 200,000 electric cars, and for Tesla that will likely occur in the next year or two.

Now what about the tax waivers for new factories? California waived an estimated $35 million in manufacturing equipment taxes to encourage Tesla to remain in the state. But seeking competitive tax treatment and lowering the tax burden for new investment is par for the course in American business, particularly in the auto industry, and it is not the same thing as living off government subsidies. Take the Walt Disney Company, for example, which was recently granted about $267 million in tax rebates over the next two decades – for a hotel.

Concluding that Tesla is just another pet project of government, a la Solyndra, is way off base. Let’s cut Musk and the folks at Tesla a little slack. In a business world where the epithet “disruptive” has degenerated into just another buzzword, this company is truly smashing up the status quo.

Edward Stringham, author of Private Governance: Creating Order in Economic and Social Life, is the Davis professor of economic organization and innovation at Trinity College. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.

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