Tesla gets a huge win in Michigan as direct sales ban bill flops in state senate
Might this be the first domino to fall in the fight against direct sale bans?!
House bill 6233 in Michigan has quietly been put out to pasture after their state senate failed to take any action before recess. The bill would have banned direct sales of automobiles in the state where the automotive industry began.
Seen as 'anti-EV' by many, this bill would have effectively banned the sales of Tesla, Lucid, Polestar, and Rivian, due to the fact they use a direct sales structure. If you're not familiar, this means they don't have independently owned dealers - they're all corporate-owned and hence, direct-sales.
The direct-sales structure is contrary to the independent franchises we've seen in the US, with laws popping up against it since the 1930s. The laws were first touted as protectionist for the resellers in the event a manufacturer decided to open a dealer next door to compete against the independent franchisee.
Charlie Deets @charliedeets
As time has marched on, however, these laws have come to be seen as 'anti-EV' due to the sales structure of all the electric vehicle manufacturers. The direct-sales bans in states such as New Mexico, Alabama, and South Carolina (all have banned service centers too) are believed to hamper EV vehicle adoption rates.
With states such as California creating laws to ban all but zero-emission vehicles (starting in 2035) it can only be assumed the direct sales laws will fail or be rolled back as more and more people are forced to buy EVs. Long-standing manufacturers are making more and more EVs each year - whether they like it or not - leading to further competition in the market. The atmosphere for conflict should only become more palpable if more bills banning direct sales are introduced.
Colton Kresser @coltonkresser
Why might an auto-manufacturer want direct sales? Reasons such as control over the buying process and the fact servicing EVs won't be as profitable as the dino-fueled brethren. Servicing EVs is considerably less when you account for the lack of spark plugs, filters, emissions-related parts, and even brake pads - energy spent into brake pads is routed through regenerative braking instead. Other than suspension components, there isn't going to be a lot to fix.
If the automotive servicing model is broken with EVs and dealers make most of their money with service... why would you want independent dealers? Direct sales and the control over the pricing structure and customer experience therefore become vital to the success of the brand. But this is a complicated discussion - what do you think?!