Florida Governor Signs Car Sales Bill with Exception for Electric Vehicles

On June 13, 2023, Florida Governor Ron DeSantis signed a bill that prohibits car manufacturers from selling directly to consumers in the state.[0] The bill serves as a protection for dealerships, preventing manufacturers from bypassing them, and also presents a bit of a blow to manufacturers.[1] The bill prohibits car manufacturers from owning or operating a dealership if they have distributed cars under a franchise agreement with an independent person in the state.[2] However, electric car companies like Tesla are exempt from this restriction.[3] Startups like Rivian and Lucid, which have followed Tesla’s lead on direct-to-consumer sales, are also exempt.[4] This essentially prevents all legacy automakers from going direct-to-consumer, but it will allow for the newer brands to take advantage of the direct-sales model.[1] The bill also prevents automakers from requiring dealers to set prices at recommended prices, incentivizing sales, or using inventory to incentivize lower prices.[5] The law goes into effect on July 1, 2023.[5]

Despite Florida’s new law, other states have floated similar laws without exceptions for electric car manufacturers. As a result, Tesla and Rivian would have to build brick-and-mortar dealerships just for the privilege of selling to residents of those states.[6] Florida’s law differs in its exception for electric vehicle brands, creating a unique advantage for EV-only companies like Rivian, Lucid, and Tesla, which can continue selling their EVs directly to buyers without the involvement of traditional dealerships.[6]

In addition to the car sales bill, Governor DeSantis signed the “Move Over” law, which requires drivers to move over for broken down cars on the roadside, even when first responders are not present.[7] The law requires motorists to move over to a different lane, if possible, when first responders are on the roadside.[8] If a driver cannot safely move over, the law requires them to reduce their speed to 20 mph less than the posted speed limit.[8] About 350 people are killed every year outside of a disabled vehicle or on the roadside, and on average, about two first responders or tow truck drivers are killed every month.[8]

DeSantis’ signing of the car sales bill comes less than a month after he launched his presidential campaign with the help of Tesla CEO Elon Musk through a Twitter Spaces interview.[4] During the event, DeSantis praised Musk for his purchase of Twitter, calling him a “free speech advocate.”[1]

The Florida Automobile Dealers Association (FADA) lobbied for the car sales bill, insisting that it is necessary to “protect the competitive nature of the franchise system.”[6] FADA claimed that “the franchise system has always driven prices down for the consumer” and that dealers “offer every advantage of the direct sellers” while remaining local.[6] According to Dave Ramba, a lobbyist for FADA, if auto manufacturers eliminate dealers, it would lead to increased prices and reduced customer service for the public.[6] FADA says dealerships create “fierce price competition,” prevent manufacturer monopolies, protect consumers with recall, warranty, and repair service, allow for test driving, simplify the complicated process of buying and registering a vehicle, provide many local jobs, and generate tax revenue.[5]

0. “Car dealer trade group “heavily involved in writing” Florida’s new ban on selling cars direct to consumers” Boing Boing, 15 Jun. 2023, https://boingboing.net/2023/06/15/car-dealer-trade-group-heavily-involved-in-writing-floridas-new-ban-on-selling-cars-direct-to-consumers.html

1. “Why Ford, GM, and Toyota Are Mad At DeSantis (Tesla Isn’t)” Rockdale Newton Citizen, 16 Jun. 2023, https://www.rockdalenewtoncitizen.com/arena/thestreet/why-ford-gm-and-toyota-are-mad-at-desantis-tesla-isnt/article_9df6e67d-6b17-5124-ae26-dfdd43a391e2.html

2. “Direct-to-consumer vehicle sales banned — with exceptions” Automotive News, 15 Jun. 2023, https://www.autonews.com/dealers/direct-consumer-vehicle-sales-banned-exceptions

3. “Florida legislation restricts direct car sales, except for electric vehicle brands” Drive Tesla Canada, 16 Jun. 2023, https://driveteslacanada.ca/news/florida-legislation-restricts-direct-car-sales-except-for-electric-vehicle-brands

4. “DeSantis bans direct-to-consumer car sales, leaves Tesla exception” Business Insider, 15 Jun. 2023, https://www.businessinsider.com/desantis-law-bans-direct-to-consumer-car-sales-tesla-exception-2023-6

5. “Elon Musk’s Tesla EVs exempted from Florida ban on direct car sales” Tallahassee Democrat, 16 Jun. 2023, https://www.tallahassee.com/story/news/politics/2023/06/16/elon-musk-tesla-exempt-florida-ban-on-direct-car-sales-dealerships/70329000007

6. “Florida Doubles Down on Anti-Competitive Car Dealership Law” Reason, 15 Jun. 2023, https://reason.com/2023/06/15/florida-doubles-down-on-anti-competitive-car-dealership-law/

7. “Florida ‘Move Over’ law expanded: drivers will soon have to move over for stalled vehicles” NBC 6 South Florida, 14 Jun. 2023, https://www.nbcmiami.com/news/local/florida-move-over-law-expanded-drivers-will-soon-have-to-move-over-for-stalled-vehicles/3053972

8. “Changes are coming to Florida’s Move Over law for drivers” WJCT NEWS, 15 Jun. 2023, https://news.wjct.org/state-news/2023-06-15/changes-are-coming-to-floridas-move-over-law-for-drivers

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