Dealer franchise laws in the United States prevent manufacturers from selling directly to customers in most states. This means car shoppers are forced to buy new cars via authorized dealers. These laws were written to protect local businesses and consumers, but as we've seen recently from insane vehicle markups, they are now having the opposite effect in many cases. A new West Virginia house bill (HB 4560) seeks to expand dealers' stranglehold over the new vehicle market by blocking over-the-air software updates.

As a reminder, OTA updates allow automakers like Tesla to remotely add important new features or even increase the car's performance and range without needing a trip to the dealer. A provision in the bill listen under prohibited practices reads as follows:

"Except for experimental low-volume not-for-retail sale vehicles, cause warranty and recall repair work to be performed by any entity other than a new motor vehicle dealer, including post-sale software and hardware upgrades or changes to vehicle function and features, and accessories for new motor vehicles sold by a licensed new motor vehicle dealer. Provided however, this language shall not include any post-sale software upgrades to the motor vehicle's navigation or entertainment system."

So aside from map updates, which are necessary to keep a navigation system functional, the bill would prohibit any and all software upgrades from adding performance by any entity aside from the authorized dealership. This bill could disproportionately impact owners of Tesla vehicles like the Model Y, as the company sends most of its important vehicle updates through OTA updates, leaving service centers to handle mechanical issues like brakes and suspension.

If the bill passes, vehicle owners would be required to visit their local dealership for software upgrades that could easily be delivered conveniently via an OTA update. Not only is this inconvenient for customers, but it also creates a safety issue if important updates can not be delivered in a timely manner. HB 4560 was introduced to the West Virginia House on February 7, 2022, and still requires approval (with possible amendments) in the state Senate. No other state has proposed such a ban, and we hope this section is removed from the final bill.