Mississippi Passes New Motor Vehicle Commission Law – Regulates Dealers, affects EV Manufacturers
Originally posted March 15th 2023 at 3:30am
Updated post March 15th 2023 at 10:20pm, added response from Tesla
JACKSON MS – March 15th 2023 – Mississippi Governor Tate Reeves signed a bill (HB 401) Tuesday which restricts car manufacturers from selling vehicles in person unless they utilize franchised dealerships. This will have a direct impact on electric vehicle manufacturers, which typically sell their EV units via manufacturer owned distribution centers, such as the Tesla location in Brandon MS which opened July 30th 2022.
The bill does not prohibit the sale of electric cars in the state, as consumers will still be able to purchase them online. Should a consumer wish to purchase an EV in person in Mississippi however, they would be able to do so only at the state’s single Tesla location (255 Mar-Lyn Drive, Brandon MS 39042), which will be allowed to remain open under the new law. Effective July 1st 2023, the law prohibits Tesla or any other electric car company from opening a new brick-&-mortar location to offer the sale of vehicles unless they enter a franchise agreement.
Despites efforts from several fellow Republicans in the State Legislature to veto the measure, Governor Reeves enacted the bill into law. The bill was first introduced by Rep. Trey Lamar (R – Senatobia). The law will compel electric car companies such as Tesla and Rivian to sell vehicles via the traditional franchise dealer model rather than company-owned stores, which is how they currently operate.
Before the bill passed in a bipartisan 39-13 vote on March 3rd 2023, a more than hour-long debate ensued mostly between Republican lawmakers. Opponents to the bill indicated it would interfere with the automobile market, possibly inhibiting electric carmakers from bringing new technology and jobs to Mississippi. Proponents said the law would ensure that all car manufacturers, regardless of their business model, play by the same rules.
Referring to the traditional dealers throughout the state, Governor Reeves said in a statement posted on social media “Today, I signed HB401 to restore Mississippi’s auto dealer franchise law back to how it had been interpreted for the last 50 years. Almost 200 small businesses in communities across our state are seeking assurances that big manufacturers can’t just destroy their businesses. That’s fair! I also recognize that innovation in this industry is inevitable. And with innovation comes new companies with new business models. I am committed to find long-term solutions—in an ever changing market. I look forward to working with all parties going forward to do just that.”
Opponent of the bill, Sen. Brice Wiggins (R- Pascagoula), had hoped Governor Reeves would veto the legislation. Lawmakers were hoping to attract Tesla to open an additional location on the Mississippi Gulf Coast, which Wiggins called the state’s economic driver.
“In today’s world, if you don’t innovate, you lose out. We as a state cannot afford to lose out,” Wiggins told The Associated Press on Tuesday. “My vote against the bill was a vote for capitalism, competition and innovation rather than for a policy of protectionism.”
Before Governor Reeves enacted the bill into law, Douglas Carswell, Mississippi Center for Public Policy President and CEO, stated “It’s not consistent with free-market conservative ideals. The Governor should veto this bill because this bill is inconsistent with conservative principle. This bill is protectionist.”
Sen. Scott DeLano (R- Biloxi) said in support of the bill, “This is not about protection of the dealerships. This is about providing the protection for the consumer. If the electric vehicle manufacturers want to provide that same level of service that we require of all of our other manufacturers, then we welcome them to our state. We want them to come in here.” DeLano further stated, “But I can also say that we’re not changing anything. They can go online and purchase a vehicle today, just the way that they’ve always done. We’re not limiting their accessibility to these cars.”
It’s also worth noting that the new law will not prohibit EV manufacturers from adding service locations in the state.
Added 10:20pm, March 15th 2023: We spoke with Josh Hazel, President of the Tesla Owners Club of Mississippi. Said Hazel, “It is unfortunate Mississippi’s elected officials have chosen to pass this protectionist bill at the demand of lobbying groups, and in direct opposition to the wills and best interest of Mississippi consumers.This bill only hurts Mississippi by preventing the innovative businesses of tomorrow from establishing a presence in the State. We look forward to this bill being challenged in the courts as unconstitutional.”
HB 401 Timeline – CLICK HERE
HB 401 PDF – CLICK HERE
How the MS House Voted – Jan 12th 2023 – CLICK HERE
How the MS Senate Voted – Mar 2nd 2023 – CLICK HERE