Miss. Law Requires EV Makers to Franchise for In-Person Sales
NADA said some carmakers have ‘serious bottlenecks’ in their service departments, ‘problems that are nonexistent with manufacturers that use local dealerships.’
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Miss. Law Requires EV Makers to Franchise for In-Person Sales
NADA lauds measure, saying it preserves competition for consumers’ good while helping to preserve dealers’ livelihoods.
Mississippi state legislators passed a law that requires carmakers to operate franchised dealerships for in-person sales, forcing Tesla and other electric-vehicle manufacturers to depart from their direct-sales models for consumers wanting to visit a store.
That means carmakers such as Tesla couldn’t operate company-owned stores there, as Tesla has heretofore, though it will be allowed to continue operating its sole existing company-owned store there. Rivian, which opposed the law, has said it won’t have an in-person presence in the state due to the change.
The National Automobile Dealers Association heralded the measure as a win for consumers and the small businesses of dealerships, saying Mississippi is leading the way on the issue. NADA and other dealership advocates have decried direct sales as a threat to the established franchise model.
NADA President Mike Stanton said in a statement that, “Local dealerships are a pillar of economic growth in communities across America and Mississippi. Mississippi gets it – local dealerships are efficient, effective, accountable, and create greater choice, access, and affordability for consumers everywhere.”
NADA said the state has nearly 175 franchised dealerships, which it said maintains sales and service competition, giving consumers choices across the state. It said some carmakers have “serious bottlenecks” in their service departments, “problems that are nonexistent with manufacturers that use local dealerships.”
The Mississippi dealers group echoed that sentiment.
“This law, HB 401, establishes one set of rules for all auto manufacturers in the state of Mississippi,” said Mississippi Automobile Dealers Association President Marty Milstead. “It’s rewarding to know that Mississippi lawmakers recognized the importance of the strong dealership network in our state.”