A new Florida law is changing the way cars are allowed to be sold in the Sunshine State, handicapping the nation’s biggest automakers and giving electric vehicle makers a boost.
Gov. Ron DeSantis this week approved HB 637, which prohibits legacy automakers from offering direct-to-consumer or online sales if the company already sells vehicles in the state through dealerships. That means companies with existing car fleets – like Ford and General Motors – will be affected by the ban.
However, by law, any person or entity that does not already have independent dealers can sell cars directly. These include electric vehicle manufacturers such as Rivian, Polestar, Lucid and Tesla.
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States like Louisiana, New Mexico and Texas also ban automakers from selling directly to motorists, but Florida’s law, which goes into effect July 1, is unique in that it actually provides an exception for certain companies.
The DeSantis and Tesla offices did not immediately respond to a request for comment.
Tesla has fought for and won the right to sell directly to customers in Delaware and Michigan. The Elon Musk-owned company is currently suing the Louisiana ban, calling it “protectionist, anti-competitive and inefficient,” Portal reported.
GM said in a statement to CBS MoneyWatch Friday that it “will continue to support our customers while complying with Florida laws.”
Ford and Stellantis, Chrysler’s parent company, referred their questions to the industry group Alliance for Automotive Innovation (AAI), which declined to comment on Friday.
In May, AAI called on DeSantis to veto legislation that the group said would “make buying a vehicle more of a hassle.” The measure would “make vehicles more expensive to own by continuing to add unnecessary costs to the vehicle franchise system,” AAI said. The group argued that restricting customers to only shop from retailers also limits the amount of shopping opportunities, the group argued.
“This delays the vehicle buying process and does not reflect the preferences of modern consumers who prefer to shop, customize and have the peace of mind that the vehicle they want is available for purchase,” the group said.
Critics say the law could create an unlevel playing field between older automakers and their EV-focused competitors. According to automotive experts and federal regulators, dealerships are notorious for charging unnecessary fees on transactions, which ultimately drives up a vehicle’s final purchase price. Direct selling eliminates this price level and potentially gives electric vehicle manufacturers a price advantage.
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Christopher J Brooks