Tesla, EV Peers Face Another Direct Sales Hurdle As Florida Seeks To Protect Dealerships

Two bills aimed at prohibiting automakers from selling vehicles directly to consumers were introduced in the Florida House and Senate on Wednesday.

What happened: The bills, Florida House Bill 637 and Florida Senate Bill 712, sponsored by Rep. Jason Shoaf and Sen. Bryan Avila, respectively, seek to prevent automakers from selling directly to customers or reserving vehicles for customers, Teslarati reported.

That could potentially threaten Tesla Inc‘s TSLA as well as other new-age electric vehicle makers’ business models.

At present, direct-to-consumer sales are legal in Florida.

See Also: How To Buy Electric Vehicle (EV) Shares 

One bill seeks to regulate automakers from incentivizing dealers to sell certain automobiles, including electric vehicles. Ford Motor Co F, Hyundai and General Motors Co GM are among the major names that incentivize the sale of EVs.

The bills also seek to prohibit automakers from involving in pricing, providing dealers the power to mark up the vehicles. However, they would let automakers engage in direct sales only if there were “no franchised dealerships selling such vehicles within the state.”

Though both the bills have received backing from dealers and dealership groups, neither has made it to voting.

Why It Matters: Tesla is the largest electric vehicle company by units in the U.S. but it still faces several disadvantages to traditional automakers, as several states still prohibit direct sales to protect franchise dealerships against new automakers.

The Elon Musk-led company, however, has been fighting to get its way in some states and using clever loopholes in others.

Price Action: Shares in Tesla rose 1.7% to $200.86 on Wednesday and gained nearly 0.8% in extended trading, according to data from Benzinga Pro.

Read Next: Elon Musk Says Tesla Inheriting ‘Incredible’ Silicon Valley Legacy With California Engineering HQ