A new bill passed by the state's senate forbids carmakers like Tesla from having direct sales.
The Mississippi Senate has approved a new bill forbidding electric vehicle automakers like Tesla and Rivian from selling directly to consumers and instead must operate with the traditional franchise dealer sales model. This issue has been happening for years between EV brands and state governments. Some Mississippi lawmakers are clearly aiming for yet another fight.
"We're saying if you choose to have a brick-and-mortar dealership, you have to follow the same laws that everyone else has to follow," said Republican state Senator Daniel Sparks, per the Associated Press. "Please don't tell me Tesla's car doesn't identify as a car." The state has not enshrined this into law just yet since Governor Tate Reeves has not said whether or not he will sign the bill. Perhaps it's best for him to wait because his fellow Republicans, who control the senate, are split on the issue.
On one side of the argument, these lawmakers are saying that denying direct sales betrays conservative principles of staying out of the free market. The other side argues that all automakers, regardless of what types of vehicles they build, must abide by the same rules. But opponents of the proposed new law have another valid argument: denying direct sales could prevent EV automakers from bringing new jobs and technology to the state. Mississippi, as it just so happens, has the highest poverty rate in the US.
State residents can already buy themselves a new Model 3 or Model Y but the single Tesla facility in the state is officially classified as a store rather than a dealer. This is the workaround, proponents of the new law say, gives Tesla and potentially future EV brands specific privileges traditional automakers lack. And yes, the proposed law comes directly from traditional car dealers and their lobbyists who feel threatened by EV carmakers.
It's important to point out that the bill would not prevent in any way EV sales; consumers would still be able to continue buying them online. Making an in-person purchase at a dealer is the issue. The sole Tesla store in the state would be allowed to remain open if the bill becomes law but any future store, whether it's Tesla, Rivian, or any other EV brand, would have to enter a franchise agreement.
The dealership franchise issue has been raging for years across the US. States like Michigan, Illinois, and Texas were in the spotlight at one point or another. In other states, such as New Mexico, Tesla took advantage of a legal loophole.
Colorado passed a bill allowing direct sales in 2020 but only if those automakers lacked established dealer networks. Instead, they can open "showrooms" where consumers can view the vehicles and ask questions before placing an order.
Join The Discussion