Florida has introduced new legislation that puts restrictions on automakers selling vehicles directly to consumers, except for a significant exception that allows electric car companies like Tesla to continue their direct sales approach.
Under House Bill 637 automakers are prohibited from bypassing franchised dealerships and selling vehicles directly to consumers. However, this restriction does not apply to companies that do not have pre-existing franchise agreements with independent dealers in the state. (via InsideEVs)
While this legislation aligns with similar laws in other states that prevent legacy automakers from direct to consumer sales, Florida’s law differs in its exception for electric vehicle (EV) brands. This exception creates a unique advantage for EV only companies like Rivian, Lucid, and of course Tesla, which enables these companies to continue selling their EVs directly to buyers without the involvement of traditional dealerships. On the other hand, vehicles such as the Mustang Mach-E would still be subject to retail pricing through dealers due to Ford’s pre-existing franchise agreement.
In addition to restricting direct sales, House Bill 637 also prevents automakers from imposing specific pricing requirements on dealers. Furthermore, manufacturers are obligated to maintain consistent vehicle allocations to dealerships, ensuring fairness and preventing excessive dealer markups on popular models.
The new law also poses challenges to Ford’s Model e program which plans to introduce no-haggle pricing, among other things, in the near future. Ford, along with other Detroit-based automakers, has yet to respond to the legislation. However, General Motors has issued a statement emphasizing its commitment to complying with Florida law while supporting its dealers and customers.