A bill from Mississippi that prohibits EV manufacturers from selling their vehicles directly to consumers instead of through franchised dealers has been made law.
The measure, which had been adopted by the Legislature earlier in the month, was signed by Mississippi Governor Tate Reeves on March 14. The new rule prohibits automakers from owning, running, or controlling their own dealerships, but it makes an exception for a Tesla outlet that already exists in the state.
Reeves said that the bill will defend Mississippi’s auto dealers. “Almost 200 little enterprises in towns all around our state are looking for guarantees that giant manufacturers won’t just wipe them out. On March 14, Reeves posted on Facebook following the signing of House Bill 401. “I also understand that this industry will inevitably see innovation. New businesses with novel business models also arise as a result of innovation. In a market that is constantly evolving, I am dedicated to finding long-term solutions. I’m looking forward to continuing to collaborate with all stakeholders to achieve that.”
The Mississippi Automotive Dealers Association claims that the law grandfathers in an existing Tesla site. The association’s president, Marty Milstead, called it “gratifying to know that Mississippi lawmakers acknowledged the necessity of a robust dealership network that we have in our state.” Adding, “In Mississippi, all manufacturers are subject to the same set of rules.”
Startup EV producers like Rivian and Lucid, which adopt Tesla’s strategy of selling cars directly to customers instead of through a franchised dealership network, have pushed for exceptions to dealer franchise restrictions in recent years to support their business model. According to Rivian, “HB 401’s passing and signature is a setback for both Mississippi’s economy and residents in terms of consumer choice and sends Mississippi in the wrong path.”
