Using what can only be described as outdated and regressive legislation, auto dealers in Michigan, US, are attempting to block electric vehicle (EV) startups like Rivian and Lucid from selling directly to consumers in the state. Except, it’s fine with Tesla doing just that.
Last week, a bill was introduced in the state, that would prevent direct-to-consumer car brands selling in Michigan without a dealer as an intermediary, Bloomberg reports. It would also prevent the startup carmakers from owning and operating after sales service center sin the state too.
Earlier this year, Tesla managed to find a way around Michigan’s antiquated legislation without acquiring a dealer license. Instead, by it came to an agreement to use official loopholes, which include registering vehicles in another state and shipping them in, and performing services under the guide of a wholly-owned subsidiary in the state.
According to a Rivian official, the bill could be voted on later today, but whether that will seal the fate of direct-to-consumer EV brands remains unclear.
The Michigan Automobile Dealers Association, which represents around 600 dealerships, says the bill is intended to remove any ambiguity, citing the fact that Tesla being cleared to sell in the state didn’t change the law. It seems the state’s motor trade is intent on preventing any others from following in Tesla‘s footsteps and eating into legacy automakers’ local market share.
The whole thing couldn’t be more anti-innovation if it tried.
Building a robust dealer network is no easy task, and many EV startups are relying on direct sales models to reach a wide geographic spread of potential customers. And so Michigan’s ruling could throw a spanner in the works for a number of carmakers yet to bring their cars to market.
It seems that any new EV startup that doesn’t already have an established dealer network in the state will have to go through the same process as Tesla and challenge the legislation directly.
Spare a thought for Rivian, though. With offices in the Plymouth, it classes Michigan as one of its home states, being barred from selling would certainly be bitter pill to swallow.
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Published September 22, 2020 — 13:06 UTC