It was no surprise on March 2 when the Mississippi Legislature sent Gov. Tate Reeves a bill affirming that electric vehicle manufacturers selling their cars at brick-and-mortar locations in Mississippi have to follow the state’s franchise business laws.
The House passed the bill 105-9 in January and the Senate followed with a 39-13 vote of approval. The relatively few lawmakers who opposed the legislation said it sets limits on the free market. They also warned it may prevent EV manufacturers from locating facilities in the state.
The bill’s opponents are correct. But they should remember that one of government’s core functions must be to keep the playing ground as level as possible. Is it fair to require gasoline-powered vehicles to be sold through franchise dealerships — but not electric vehicles?
More to the point, car dealership owners tend to be prominent members of their communities. They’re not exactly the people that any lawmaker, even the most fervent free-marketeer, wants to antagonize by giving the competition a break. So it’s easy to understand why a lot of Republican lawmakers voted to apply franchise laws to electric vehicle sales.
Besides, if Mississippi has learned anything about new technologies over the last 25 years, it’s that we tend to be too generous with them.
Great Idea No. 1: Let’s exempt internet companies from free-speech liabilities so we can turn the online world into a sewer of insanity and make-believe.
Great Idea No. 2: Let’s not require internet companies to pay state sales taxes, so we can watch the Amazons of the world run national chains and locally owned stores out of business.
Great Idea No. 3: Let’s shovel tax breaks and grants to alternative-energy companies instead of telling them to keep innovating so that the cost of their energy more quickly becomes competitive with carbon-based supplies.
Now, it may be that Mississippi’s laws governing franchise sales are ripe for review. But the larger point is that it is patently unfair to apply these laws to one set of vehicle-selling businesses while exempting another set.
Put another way, a car dealership is the middleman in the transfer of a vehicle from manufacturer to driver. Tesla does not want a middleman, and a Mississippi resident still can buy a Tesla online directly from the company.
But if some brick-and-mortar dealers have to play by the franchise rules, then all of them should. Otherwise, drop the rules for everyone.
Right now, a Tesla business in Pearl is the only location in Mississippi that sells electric vehicles. According to the Magnolia Tribune website, the Tesla outlet is defined as a “store” and not a “dealership” — whatever that difference may be. This allows the Pearl location, which is protected in the bill sent to Gov. Tate Reeves, to operate under different business rules. Is that fair?
Car dealers are not blind. They know more electric vehicle “stores” are coming, and they know their own automakers will be rolling out their own electric models very soon. But lawmakers in the future should keep the impact of those Great Ideas in mind as they try to figure out how to create fair competition for all.
— Jack Ryan, McComb Enterprise-Journal
