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Coast senator opposes ‘backwards’ bill that would make it harder to buy a Tesla in MS BY DAVID CARACCIO
A bill quickly making its way through the Mississippi Legislature could make it harder for electric car companies to sell their House Bill 401 would prevent car companies from operating their own brick-and-mortar locations within the state, requiring them to do so through an independent dealer or franchisee. The bill passed the House by a margin of 105-9 earlier this month and made its way through the Senate Finance Committee on Thursday. It now heads to the full Senate. Then, if passed, it would reach the governor’s desk. Supporters of the bill say it evens the playing field between traditional car dealerships, which operate as franchises, and electric car companies, which typically operate under a direct-to-consumer business model. Sen. Daniel Sparks, R-Belmont, sponsored the bill in the Senate. He told the committee Thursday that he believes manufacturers and dealers operating separately has not just been the norm in Mississippi, but that it has been enshrined in state law for more than 50 years. “This bill establishes that prohibition that some of us believe already existed,” Sparks said. Get unlimited digital access Try 1 month for $1 CLAIM OFFER WHAT DOES BILL MEAN FOR TESLA OFFICE IN MISSISSIPPI? Currently, Tesla is the only electric car company operating a corporate-owned physical location in the state. Prior to opening that location last year, Tesla applied for both a manufacturer’s license and a dealer’s license. The Motor Vehicle Commission asked the attorney general’s office to issue an opinion on the state’s franchise law. They ruled that issuing both kinds of licenses did not violate the law, and the commission allowed Tesla to move forward. Sparks said he believes that opinion was decided incorrectly, and he would like to see HB 401 passed to make the law clear that such an arrangement should be prohibited. “This legislation clarifies what has been followed for 52 years prior,” Sparks said. “I disagree with it. I think that it is not inside the spirit of the letter of the law. Now, the attorney general’s opinion, has a right to offer an opinion. That is couched by the fact that it is named an opinion. We write law.” Transfer of Power A special newsletter from our D.C. Bureau focused on transition to the Biden administration. SIGN UP This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. If the bill becomes law, Tesla would be allowed to keep its existing storefront in Brandon but would be prohibited from opening any others. Other electric car companies would be blocked from opening physical stores entirely. Rivian, for example, does not currently have a physical location in the state and is actively lobbying against HB 401. RIVIAN LOBBYING AGAINST CAR BILL “This is a critical issue to us, to a handful of other companies in the electric vehicle space,” said Beau Whiteman, Senior Policy Advisor at Rivian. “The current franchise-dealer model was set up 100 years ago, and really kind of formalized post-World War Two, and we should be very clear Rivian, Tesla and the handful of other companies that are in the space, we are not running around out here advocating for the end of this system. We simply don’t want to be a part of it ourselves. Our business model does not align with it.” During the hearing, Sparks said that electric car manufacturers could operate in Mississippi if they are willing to work through franchised dealerships. Whiteman said that is not something Rivian will do. “Customers in Mississippi will just have to go without a physical presence, and it’s to their own detriment,” Whiteman said. One of the reasons that electric car companies are hesitant to work with independent dealerships is they would like to ensure high quality and well-performed service on their vehicles, Whiteman said. For Rivian in particular, they insist that any of their products can be serviced at any of their locations, from their traditional cars to vans they are producing for Amazon. “All of our facilities are meant to service all of our products,” Whiteman said. “One of the big complaints in the statehouse right now that we’re hearing is about Ford and its Mach E Blue program that if dealers want to sell Ford’s future EVs, they’re going to have to invest in facility improvements, charging infrastructure. Our facilities are kind of extreme because they service these meaty EV vans, which your average dealer doesn’t do that.” COAST SENATOR OPPOSES BILL Sen. Jeremy England, R-Vancleave, is one of the most vocal detractors of the bill. He says it prevents businesses from operating freely. “What this bill is trying to do is tell them you cannot use your sales model in Mississippi to sell your product to consumers, and that bothers me when we do that. This is an innovative, new product. I think that its one that the younger generation is particularly interested in, so when we talk about things in Mississippi like attracting new businesses, but also preventing brain drain, I think this bill really goes into the face of all of that,” England said. “It makes us take a step backwards. Other states are moving forward.” In the hearing Thursday, England said that blocking out a particular industry flies in the face of conservative principles. That said, Whiteman said policy on this issue transcends party lines, pointing to California and Florida both being leaders in welcoming electric car manufacturers. Garrett Scott, assistant professor of economics at the University of Mississippi, said barring electric car companies from operating in the state seems to go against traditional views of economic best practices. “A bill like this would lead reduced market power, obviously, for the electric car companies, which would hurt competition in general, and we usually think competition is good for consumers,” Scott said. “This will also increase kind of the bargaining power of the independent dealerships as well, which could potentially harm consumers when they’re shopping from the dealerships.” A similar fight took place last year, as noted by both Sparks and England, though the two characterized what happened very differently. Sparks said HB 401 is similar to a bill that passed the Senate last year, while England pointed out that the version that passed the chamber was amended. The House and Senate were unable to agree to a compromise between the two versions, and the bills died in conference committee. When the bill came before the committee Thursday, England proposed an amendment to make a similar change to last year, increasing the cap on dealerships from one to seven. This time around, that amendment failed.
Read more at: https://www.sunherald.com/news/politics-government/article271835757.html#storylink=cpy
A bill quickly making its way through the Mississippi Legislature could make it harder for electric car companies to sell their House Bill 401 would prevent car companies from operating their own brick-and-mortar locations within the state, requiring them to do so through an independent dealer or franchisee. The bill passed the House by a margin of 105-9 earlier this month and made its way through the Senate Finance Committee on Thursday. It now heads to the full Senate. Then, if passed, it would reach the governor’s desk. Supporters of the bill say it evens the playing field between traditional car dealerships, which operate as franchises, and electric car companies, which typically operate under a direct-to-consumer business model. Sen. Daniel Sparks, R-Belmont, sponsored the bill in the Senate. He told the committee Thursday that he believes manufacturers and dealers operating separately has not just been the norm in Mississippi, but that it has been enshrined in state law for more than 50 years. “This bill establishes that prohibition that some of us believe already existed,” Sparks said. Get unlimited digital access Try 1 month for $1 CLAIM OFFER WHAT DOES BILL MEAN FOR TESLA OFFICE IN MISSISSIPPI? Currently, Tesla is the only electric car company operating a corporate-owned physical location in the state. Prior to opening that location last year, Tesla applied for both a manufacturer’s license and a dealer’s license. The Motor Vehicle Commission asked the attorney general’s office to issue an opinion on the state’s franchise law. They ruled that issuing both kinds of licenses did not violate the law, and the commission allowed Tesla to move forward. Sparks said he believes that opinion was decided incorrectly, and he would like to see HB 401 passed to make the law clear that such an arrangement should be prohibited. “This legislation clarifies what has been followed for 52 years prior,” Sparks said. “I disagree with it. I think that it is not inside the spirit of the letter of the law. Now, the attorney general’s opinion, has a right to offer an opinion. That is couched by the fact that it is named an opinion. We write law.” Transfer of Power A special newsletter from our D.C. Bureau focused on transition to the Biden administration. SIGN UP This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. If the bill becomes law, Tesla would be allowed to keep its existing storefront in Brandon but would be prohibited from opening any others. Other electric car companies would be blocked from opening physical stores entirely. Rivian, for example, does not currently have a physical location in the state and is actively lobbying against HB 401. RIVIAN LOBBYING AGAINST CAR BILL “This is a critical issue to us, to a handful of other companies in the electric vehicle space,” said Beau Whiteman, Senior Policy Advisor at Rivian. “The current franchise-dealer model was set up 100 years ago, and really kind of formalized post-World War Two, and we should be very clear Rivian, Tesla and the handful of other companies that are in the space, we are not running around out here advocating for the end of this system. We simply don’t want to be a part of it ourselves. Our business model does not align with it.” During the hearing, Sparks said that electric car manufacturers could operate in Mississippi if they are willing to work through franchised dealerships. Whiteman said that is not something Rivian will do. “Customers in Mississippi will just have to go without a physical presence, and it’s to their own detriment,” Whiteman said. One of the reasons that electric car companies are hesitant to work with independent dealerships is they would like to ensure high quality and well-performed service on their vehicles, Whiteman said. For Rivian in particular, they insist that any of their products can be serviced at any of their locations, from their traditional cars to vans they are producing for Amazon. “All of our facilities are meant to service all of our products,” Whiteman said. “One of the big complaints in the statehouse right now that we’re hearing is about Ford and its Mach E Blue program that if dealers want to sell Ford’s future EVs, they’re going to have to invest in facility improvements, charging infrastructure. Our facilities are kind of extreme because they service these meaty EV vans, which your average dealer doesn’t do that.” COAST SENATOR OPPOSES BILL Sen. Jeremy England, R-Vancleave, is one of the most vocal detractors of the bill. He says it prevents businesses from operating freely. “What this bill is trying to do is tell them you cannot use your sales model in Mississippi to sell your product to consumers, and that bothers me when we do that. This is an innovative, new product. I think that its one that the younger generation is particularly interested in, so when we talk about things in Mississippi like attracting new businesses, but also preventing brain drain, I think this bill really goes into the face of all of that,” England said. “It makes us take a step backwards. Other states are moving forward.” In the hearing Thursday, England said that blocking out a particular industry flies in the face of conservative principles. That said, Whiteman said policy on this issue transcends party lines, pointing to California and Florida both being leaders in welcoming electric car manufacturers. Garrett Scott, assistant professor of economics at the University of Mississippi, said barring electric car companies from operating in the state seems to go against traditional views of economic best practices. “A bill like this would lead reduced market power, obviously, for the electric car companies, which would hurt competition in general, and we usually think competition is good for consumers,” Scott said. “This will also increase kind of the bargaining power of the independent dealerships as well, which could potentially harm consumers when they’re shopping from the dealerships.” A similar fight took place last year, as noted by both Sparks and England, though the two characterized what happened very differently. Sparks said HB 401 is similar to a bill that passed the Senate last year, while England pointed out that the version that passed the chamber was amended. The House and Senate were unable to agree to a compromise between the two versions, and the bills died in conference committee. When the bill came before the committee Thursday, England proposed an amendment to make a similar change to last year, increasing the cap on dealerships from one to seven. This time around, that amendment failed.
Read more at: https://www.sunherald.com/news/politics-government/article271835757.html#storylink=cpy
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