The Simplest Way To Sell EVs In America: Don’t Include Dealerships

The simplest way to sell EVs in America is to forgo the dealership model. Make directly selling to customers legal and empower consumers by not making them haggle with dealerships.

In an article in The Atlantic, the author discussed the problem with dealerships and their allies in the political system in the US. In a nutshell, the simplest way to sell EVs is to do away with the dealership model, especially if that model is hindering America. And it is.

I’ve written extensively about how dealerships are not that favorable here in the US. They claim to be all about consumer protection, but in reality, there are too many horror stories about how dealerships have scammed customers.

Does this mean that every single employee working in a dealership is a bad person? No! It certainly does not. In fact, I typically assume most people are good-hearted. By mentioning dealerships, I’m generally referring to the establishments that decide to suppress the sales of EVs and/or rip off consumers.

The author of the piece in The Atlantic shared his experience in the Rivian R1T. His experience is a special one at this point, since test driving the R1T is illegal in over half of the US. He wrote:

“You can’t understand the Rivian R1T until you test-drive it, in other words. But that is a rare and, in a sense, illicit experience because test-driving the R1T is illegal in more than half of the United States. For perhaps as many as 200 million Americans, local antitrust laws meant to protect car dealers from unfair competition forbid automakers such as Rivian from selling directly to customers.”

The question I have is this: How is America supposed to catch up to China in EV sales if our own laws are making it extremely hard for the average American to purchase an EV? The author noted that now is a time when selling more EVs is essential to help avoid the worst disasters of climate change, but dealer protection laws are making it hard for Americans to do so. And in turn, it’s proving to be a major challenge for decarbonizing the American economy.

The author writes:

“When you want to buy pants, you have a choice. You can go to Macy’s, where they sell many different pant brands, or you can go to, say, J. Crew, where they sell only the pants that J.Crew makes. Virtually every consumer product is sold through one or both of these methods.

“If you want to buy a chair, you can go to Wayfair, but if you want to buy an IKEA chair, you have to go to IKEA. This is all so normal, so accepted, that it’s strange to describe. But this is, weirdly, not how it works for cars. Most Americans cannot buy a car directly from the automaker.”

I’ve made similar comparisons with the iPhone. And both comparisons are completely accurate. Additionally, the author emphasizes that the dealer protection laws don’t just hinder the progress of selling EVs in America, but also shape the markets for EVs. He didn’t know this until he compared New York and Florida.

Both states have around the same population, but Florida doesn’t have a statewide EV-incentive program other than allowing EV owners the use of the HOV lane. Despite that, Floridians have purchased over 60% more EVs than New Yorkers have. He noted that this difference is amplified by the fact that in Florida, people drive more than in New York. However, the clearest explanation is Tesla. He noted that Tesla sells more EVs than any other automaker and it has opened 17 stores and galleries in Florida but only 5 in New York. Tesla, he wrote, is forbidden from opening more. It makes a difference, which is why some parties fight so hard to block Tesla, Rivian, Lucid, and others from opening stores.

Consumer Protection Is A Myth

The article is an excellent and necessary read and I suggest you read it. You can do so here. The author is echoing what I’ve been saying for the past year or so. I’m going to quickly revisit an article I wrote last year. The focus was more or less on New York car dealers who were then fighting against a coalition of 114 environmental groups to keep Tesla, Rivian, and Lucid out of the state. However, the article was a long read and the part I’m revisiting is this: consumer protection is nothing more than a myth.

A quick google search will show that dealerships protect their customers about as well as hurricanes protect residents from flooding and power outages. One type of common dealership fraud is known as affirmative misrepresentation. This is where the salespeople at a dealership might tamper with the odometer, or use bait-and-switch advertising while promising that the vehicle has features that it actually doesn’t have.

Also, HG.org noted that most types of dealership fraud include withholding information that affects the value of a vehicle. Such information includes whether or not the vehicle was involved in a collision or has an expired warranty. How is this protecting the consumer?

It Should Be Easy To Sell EVs In America

In the nation where the world’s leader in EVs is headquartered (no, it’s not GM), it should be easy to sell EVs. It’s not, though, and this is due to dealership-politician relationships. As the author pointed out, it’s hard to test drive and buy EVs in many states, and companies such as Rivian can’t sell EVs directly to consumers.

There is a loophole, and this is buying online and either picking up your EV out of state or paying a third party to bring it to you. However, this doesn’t encourage the majority of Americans to make the switch to electric vehicles, and this won’t decarbonize the American economy. If America was to legalize selling EVs directly to customers and let go of the outdated dealership system that’s hindering progress, we could perhaps catch up to China and Europe.