You Can’t Buy EVs Directly from Auto Manufacturers in Iowa … But Maybe Soon
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This odd battle has been going on for so long that I had actually forgotten about it. There’s a quirk in some US state laws that they require automobiles to be sold through 3rd party auto dealers. That is actually rooted in something, in some potential for consumer abuse identified long ago. The argument is that the competition should lead to better pricing and services for consumers. However, as things have evolved, auto dealers have developed far too much power and a knack for ripping consumers off. Almost nobody likes going to the auto dealer, and most of us would probably prefer to go to the dentist.
A big additional problem that has appeared is the challenge of integrating electric vehicles into this system. Auto dealers know about gas-powered cars, not electric cars, and many argue that they are not incentivized to sell EVs. EVs require less maintenance, so auto dealers make less money on them after the initial sales. Why sell an EV you know a lot less about and will make less money on when you can simply sell a normal gas-powered car?
As a result of this problem, Tesla and Rivian have long argued that EV producers should be able to sell their EVs directly to consumers, and not have to go through a 3rd party dealer. In most states, that is allowed, but there are still a handful that won’t permit it. Ironically, the auto dealer lobby is extremely powerful — because it is so rich from fleecing consumers — and has blocked progress in these remaining states.
We might be able to cross Iowa off the list soon, though. The Hawkeye State is on the verge of passing a new bill that will allow automakers to directly sell to customers.
“American automobile manufacturer Rivian today applauded the introduction of Iowa Senate Study Bill 3067 (SSB 3067), which will allow Iowans the freedom to purchase electric vehicles directly from the manufacturer. The bill was passed out of Iowa Senate subcommittee today and is now before the full Iowa Senate Commerce Committee,” Rivian wrote yesterday.
“Iowa currently has some of the most restrictive car-buying laws not only in the Midwest but in the nation, with antiquated laws that do not embrace free-market principles in automobile purchasing. Iowans seeking to purchase an American-made Rivian, or vehicles from other innovative electric vehicle companies, currently must travel out of state, often to Missouri, Illinois, or Minnesota, to test drive the vehicle, consult Rivian product experts about the vehicle, and explore pricing. Those purchasing burdens stifle consumer choice.”
Passing this bill should be one of the most no-brainer tap-ins you can get these days, so hopefully we’ll soon learn it’s been fully passed and Iowans can buy EVs directly from manufacturers.
“Every day, Iowans make purchases directly from a manufacturer – a practice which supports consumer choice, enhances pricing transparency, and offers convenience for Iowa families,” said Aubrey Coleman, Senior Public Policy Manager for Rivian. “Unfortunately, antiquated laws from the last century prevent Iowans from having the freedom to purchase an electric vehicle directly from a manufacturer. Rivian supports Iowa SSB 3067 because it aligns with the state’s continued mission to support consumer choice and create an environment where its citizens have the freedom to flourish.”
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