The strategy of selling directly to customers via “stores” rather than traditional, independently owned dealerships has set Tesla apart from other automakers, and angered dealer associations around the country. Soon, the business model may be banned in Mississippi.
The state’s senate gave final approval to a bill that would prevent automakers from opening new brick-and-mortar stores in the state, and would require them to comply with the same dealership laws as other brands.
The proposal has inspired resistance from some senators, as it disproportionately targets EV manufacturers, reports the Associated Press. The growth of electric technology has allowed a number of startups like Rivian, Lucid, and spinoff brands like Polestar, to crop up, and they want to follow Tesla’s model of selling directly to customers.
Read: Lucid Slaps Texas With Lawsuit Over Dealership Laws
As such, the bill has been accused of being “protectionist” by Republican Senator Brice Wiggins. Senator Joey Fillingane, also a Republican, argued that the bill could cause Mississippi to fall behind the rest of the nation.
“Maybe we just like being last all the time. Maybe it’s a badge of honor – we’re the last ones to change,” Fillingane said. “If we’re not careful […] we could deprive our citizens of opportunities they really ought not to be deprived of.”
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Proponents of the bill, like Republican Senator Daniel Sparks, claim that the bill just makes laws apply equally to all automakers.
“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,” Sparks said.
Existing Stores Are Grandfathered-in
While the bill would prevent automakers from establishing new physical stores where customers can interact with their vehicles and test drive them, Tesla’s single Mississippi location will be allowed to continue operating, having been grandfathered in. Automakers will also be able to continue selling directly to customers, but only online.
Now that it has been approved by the senate, the bill moves to Governor Tate Reeves, who has not yet indicated whether he will sign it into law.