Astute readers may remember several years ago that an up and coming car company called Tesla was having some trouble selling its cars to potential customers.
At issue was a, at the time, little known or thought of law outside of the automotive industry that limited sales of cars to customers by a franchised dealer.
Tesla fought for an exemption or changing of the current law and was granted it. But the exemption was very narrowly worded to only allow for an electric vehicle manufacturer that “was selling or otherwise distributing its motor vehicles at an established place of business in this state as of January 1, 2015.” In 2015, this in effect only meant Tesla.
Fast forward a few years and, what should be unsurprising, other car companies have come along with promising futures and they would like to invest and sell in Georgia.
Rivian may be the best known but Lucid and Lordstown Motors are also interested in finding some Georgia customers – but that old law is still a roadblock.
HB 460 is a straightforward fix to state law that will allow a small group of new American manufacturers of all-electric vehicles without existing franchise dealers to establish retail locations in the state of Georgia without operating through the franchise dealer system.
“Georgia’s market should be a level playing field that maximizes choice, encourages competition, and drives new investment,” said Leslie Hayward from Rivian. “If passed, HB 460 would lead to improved consumer choice, greater market competition, accelerated innovation, increased investment, job growth, and improved air quality. Our interest is in helping the State of Georgia meet it economic development goals through removal of artificial barriers to direct distribution.”
Hayward also noted that in states like Georgia, which prohibit direct sales, Rivian or other vehicles will be sold online at a licensed location out of state. Customers in these “closed” states may view and learn about Rivian vehicles at “galleries” where products will be displayed but cannot be sold. Prospective purchasers will not be able to ask about price, trade-ins, financing or even take a test drive of these vehicles.
No test drives? Some cars are certainly sold without the test drive but that is a very small number. Research from auto-trader shows that nearly 70% of people consider the test drive a critical part of the car buying process.
Out-of-state customers also have to go through additional hurdles such as arranging for title transfer outside the state, process registration and titles themselves, and potentially even having to travel out of state (e.g., to Florida or Tennessee) to pick up their Rivian vehicle. These additional hurdles will only do a disservice to consumers and create unnecessary hurdles and stifle the free flow of commerce in Georgia.
In the Republican-led General Assembly, “free flow of commerce” should help to move votes. But car dealers also know a lot of legislators. Some legislators are car dealers. But that era of dealer dominance may have waned.
