Electric cars have taken the world by storm, with the promise of reducing carbon emissions and a greener footprint. However, not all states are happy with the proliferation of electric car stores. One of the most notable regulations against electric car dealerships is the limitation on the number of stores that they can have. This law has been in place in many states and has now been recently adopted by Mississippi.
A Little Background
The limitation on the number of electric-car stores that can operate stems from traditional automakers’ anxiety. These car makers have long taken over the car market and have revenue-generating dealerships all over the country. In 2013, Tesla, the best-known electric car maker, with its competing sales model, can challenge the traditional assumptions. Tesla’s sales model consisted of showrooms and stores online –no dealerships.
This created a conflict between Tesla and traditional automakers. The fight made headlines across the world, and Tesla emerged victorious as it has spread all over the United States. However, this also opened a can of worms, and many states implemented laws that controlled the expansion of Tesla and other electric-car manufacturers.
Mississippi Adopts the Same Law
Mississippi is the latest state to adopt this practice. Recently, Governor Tate Reeves signed House Bill 1396 into law. According to this law, electric car manufacturers are only allowed to have one retail electric car dealership in the state.
The bill was sponsored by Republican House Majority Leader Jason White. He was concerned that electric car dealerships were not following the same guidelines as other car dealerships. He raised various safety and consumer concerns in this regard.
White’s arguments are not entirely unfounded. In states like Michigan, where Tesla operates just two retail stores, traditional car makers have pointed out safety and financial issues as reasons for limiting the number of these dealerships.
The Counter Argument
Opponents of this type of legislation argue that car dealerships are there to provide necessary safety inspections and maintenance so that cars are road-worthy. However, the strongest argument against limiting the number of electric car stores is the right to free competition.
Traditional automakers, while concerned about safety and consumer issues, are primarily threatened by the potential loss of business. There are advantages to being an established business, and established car makers may have more bargaining power with suppliers, as well as a distribution network, may not be available to new entrants in the industry.
Tesla and other electric car companies are already fighting back. Tesla has challenged and overthrown many state laws that prevented them from expanding, and they have been successful in some states. Elon Musk, the CEO of Tesla, has stated his intentions to take the government to court if he believes any laws impede the company’s growth.
What the Future Holds
As more and more states adopt similar legislation, the electric car industry and its consumers could be affected. Limitations on electric car dealerships could stifle the growth of the industry, and consumers might not have the opportunity to try out new electric car technology.
One thing is sure. The fight between electric car makers and traditional automakers will continue for a long time. While many consumers and environmental groups welcome the innovation, traditional car makers see it as a threat to their business. For now, it is up to consumers and lawmakers to decide the path that the motor industry is going to take.