By banning companies such as Tesla, Rivian, Lucid, and others from selling EVs directly to their customers, states are hindering President Joe Biden’s goal of have 50% of all vehicle’s sold in 2030 being electrified. This is an awesome goal, and although the ceremony was just a show for the United Auto Workers union, it moved the needle forward.
The tweet above shows just how silly the notion of banning direct sales of EVs is while pretending to support President Biden’s goals. Tesla leads the auto industry in EV sales globally, yet is banned from selling directly to its customers in much of its own home country. How messed up is that? Outdated laws that favor the dealerships are put in place by politicians who bow down to corruption while sacrificing their own policies and agendas on the alters of fundraiser promises.
Connecticut Governor Ned Lamont tweeted that he loved the president’s goals, but Connecticut doesn’t allow Tesla, Rivian, and other manufacturers to sell directly to their customers. Instead, the state allows the dealerships to reign supreme. This is senseless and hurts consumers, and it certainly also hurts the country’s EV sales goals.
I’ve written about this extensively, and so have several other authors here at CleanTechnica. However, the problem hasn’t gone away, so I’ll recap. The key reasons why the dealer model doesn’t work are because it actually harms consumers. In some cases, consumers may be sold a faulty vehicle that they are told by the dealership is safe. This is illegal, but they still do it. Why? Because they can. Let me tell you a story.
When I was married, my ex bought a car from a dealership. It was one of those scummy used car lots where the dealer pitched $400/month as a good deal for someone with low credit. He took that deal, and one day, we were doing something and had just exited a parking lot when all four tires came off. The car had to be towed and we had to use the buses to go home. It was later discovered that the dealership had sold him a faulty car — I don’t know the specifics other than that the car was previously in an accident.
If you do a Google search on “dealership scams,” the results number into the billions. Headlines show that we have a huge issue, yet states are allowing these scams to continue. These scams hurt consumers, but up to the option of buying directly from the automaker, consumers have no choice but to get scammed or at least worry about getting scammed if they want a car.
Ironically, one of the top arguments used for why we supposedly need 3rd party dealerships is that they “protect consumers.” No joke — this is one of their most common arguments in state legal fights.
Earlier this year, the EV Freedom Bill, SB 127, proposed that manufacturers be able to sell directly to their customers. Had this law been passed, Tesla, Rivian, Lucid, Bollinger, and others would have been able to sell directly to customers. Dealerships fought this tooth and nail — and won.
Many states have these sorts of laws — including my own state. EV buyers have to travel out of state to pick up their cars if they buy them from an automaker like Tesla. How does President Biden expect to sell EVs if state politicians who double as lackeys for the campaign donors who own them refuse to allow consumers to buy EVs?
A recent Ford Mustang Mach-E buyer went through hell at a Ford dealership. The dealers didn’t know anything about the Mach-E, tried to scam him 9 ways to Sunday, and gave him really crappy customer service. He was even told by a salesperson that they had no interest in learning about the Mach-E. Not everyone’s buying experience will be that bad, but I’ve heard horror stories from friends and family members about dealerships, as well as repair scams. Several female friends have advised taking a guy with you when car shopping because dealers are likely to con a man less than a woman.
Many dealerships market themselves as a place that provides consumer protection. This is truly a myth. In fact, it’s gaslighting. I’ve written about this here, but I’ll quickly recap. The National Consumer Law Center has produced several reports and co-litigated class-action lawsuits centered around dealer scams such as interest rate markups, racism against people of color who are buying cars, and more. Some of the data found in those reports show that dealers are twice as likely to add a markup to loans to African-Americans than loans taken out by Caucasian borrowers. And when both are marked up, African-Americans pay much higher. Another study said that interest rates at New York dealerships were 311% higher for Black customers.
How can Americans “dream beyond the boundaries of possible then make it a reality” when our own states’ politicians are working tirelessly at the behest of entities such as dealerships to prevent this from actually happening? How will we achieve 50% of all vehicles sold being EVs by 2030 when dealerships would rather sell ICE cars and punish EV buyers who insist they want an EV? How can we bring together “public passion & private ingenuity” when you seek to block that ingenuity?
How do you expect companies to sell EVs if you block consumers from buying them directly? This is a method that has worked well for Tesla, the global leader in EV sales, and the company knew from the beginning that it wouldn’t survive if it had to sell cars through traditional dealers. As legacy auto struggles to catch up to Tesla’s lead, politicians bought out by various industries that want to see Tesla fail are blocking the innovation that was praised during President Biden’s UAW’s press event.
Our government will have to make some incredibly tough and painful decisions if it’s serious about taking action to help slow down global heating and the effects of tremendous climate change.
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