Franchise Act

[NMNeil]

Here in New Mexico they recently tried to introduce an amendment to the Franchise Act which means you are only 'allowed' to buy a new car from a franchised dealership.
It was tabled, but at least local politicians are aware of what might be holding back the adoption of EV's.
The auto dealerships obviously objected to anything that would cut into their profits, and as they donate a lot of money to both political parties it was a case of the golden rule; those with the gold, make the rules.
Is anyone in different States trying to get that monopoly repealed as well?
Just asking.

 

[beatle]

It's technically not just EVs they are against. Morgan is forced to use a super small network of franchised dealers as well, and they make cars out of wood (with BMW engines).

I know your own state is important, but Colorado has some of the most interesting legislature about this. It is fighting to allow legacy automakers to sell DTC using offshoot brands. Scout and VW is at the tip of the spear, but it would allow other manufacturers to follow suit. Of course dealers and their lobbyists called BS on this, so it's not over. It's probably a big reason why Scout is now delayed until 2028.

 

[AeroWolf]

Virginia requires the manufacturer to possess a Dealer License if they want to engage in direct sales. Tesla has an exception, but I think that has closed, and they are grandfathered. Otherwise strong protections for franchise dealers.

Slate may want to get a dealer license, and work through small Kiosks/repair pal partners for their delivery "dealerships."

 

[ScooterAsheville]

Oh this is an old story. NADA has immense ("P" word we're not allowed to say) power on the local, state, and federal levels. Tesla had to fight tooth and claw, state by state (to establish sales offices in those states), and lost in quite a few states. Ditto Rivian. Scout now faces the same fights. It's state by state. OEM by OEM. Often the Tesla wins were very narrow - only applicable to Tesla and only a few specified sales outlets in a given state.

It's blatantly corrupt. And I don't blame the legislators for it. I blame us for not holding them accountable.

All that said, AFAIK, Slate has no plans for showrooms or sales location outside of Indiana. So it's a total non-issue. No state can stop you from buying a vehicle in another state, then registering it in your state. That's the interstate commerce clause. You will be buying your Slate in Indiana and transporting it to your state.

The Interstate Commerce Clause, Article I, Section 8, Clause 3 of the U.S. Constitution, grants Congress the power to regulate commerce with foreign nations, among the several states, and with Indian tribes. It enables federal regulation of interstate economic activities, preventing states from creating trade barriers and fostering a national free trade zone.

 

[AKrietzer]

I think Indiana also has some rules like this. I haven't looked it up recently. It might be one reason (of many) that you can't buy a Slate at the factory.

 

[cadblu]

Interesting. All fifty states have some kind of law that prohibits or restricts direct sales of automobiles. So, how did Tesla find a loophole and create logistical workarounds?

Tesla doesn't have any dealership or selling locations in any state. Many years ago, I do recall seeing Tesla operate a storefront in Roosevelt Field shopping mall in Long Island. In fact, they actually had a few vehicles on display but were unable to provide pricing or take orders.

There are still many issues to be worked out. Three years ago, I tried to order an inventory Tesla online (at an attractive price) which was physically located in another state. When I tried to place a deposit, I received an error message: "This vehicle not available for sale in your state." Only the more expensive inventory vehicles (with the exact same features, mind you) could be sold here in NY. Bummer.

On the Scout forum which I follow, and also mentioned above, I recall reading a thread that Scout has been granted a dealer license in Colorado. I know it will be hotly contested by NADA, but hopefully it's a precedent that will work to Slate's favor.

 

[KevinRS]

The laws were meant to protect dealers when they make the capital investments, spend years, gain loyal customers for a brand, from then having the manufacturer decide to open their own store in the local area and undercut the dealer. This was a valid concern when those laws were first introduced. The dealer lobbies have only gotten stronger since.

Tesla got around it by spending a lot of money lobbying state by state, and lots of political contributions to get workarounds passed, that apply only to them. Many apply only to EV only companies that started selling before a certain year, which lets Tesla in, but no one else.
Many states have laws prohibiting a manufacturer getting a dealer license at all.

 

[bloo]

Rhode Island allows firect out-of-state purchase of vehicles, thereby bypassing the dealership rule.

An EV rebate is available only if purchased from an in-state dealer, unless there are no dealers in the state that sell it.

 

[ScooterAsheville]

Tesla doesn't have any dealership or selling locations in any state.

Tesla does not have a franchise dealer network. It does have sales and service stores/locations in most states. I test drove a Tesla at the Boston Tesla store years ago. You can walk into a Tesla store, buy your Tesla, and drive it away (if you buy from stock at that store). Or of course, you can order it online and take delivery at the closest Tesla store (which may or may not be in your state - depends on how corrupt your state is).

 

[KevinRS]

Since it's all up to state law, and each state individually has been lobbied by the dealers and manufacturers for many years, and the EV companies more recently, there is a spectrum from some states allowing new companies with no dealers to sell direct no problem, some only allowing Tesla, to some not allowing any sales in state without independent dealer middlemen and everything in between.