For several years, Elon Musk has supported Florida Gov. Ron DeSantis as a potential presidential candidate. Recently, DeSantis announced his official 2024 presidential election campaign during an appearance with Musk on Twitter Spaces.
Could the link between Musk and DeSantis have led to some electric vehicle companies getting special treatment in the state of Florida?
What Happened: Certain states in the U.S. have placed bans on direct-to-consumer (DTC) sales of automobiles, specifically electric vehicles. This has created headaches for companies such as Tesla Inc TSLA, which have gotten creative with loophole workarounds.
The state of Florida passed a law relating to the DTC sale of vehicles, but this time Tesla could be one of the biggest beneficiaries.
House Bill 637 was signed by DeSantis and will take effect in July. The new law bans automakers from using DTC methods to sell vehicles, if they don’t already have this process in place, as reported by InsideEVs.
The law will make it so many traditional automotive manufacturers have to continue using a franchise model of physical dealerships to sell their vehicles. These companies won’t be able to offer their own dealerships to sell directly to consumers, leading to potentially higher prices for consumers.
The wording of the new law suggests that companies such as Tesla, Rivian Automotive Inc RIVN and Lucid Group Inc LCID can continue to utilize a DTC business model that doesn’t include franchised locations.
Traditional internal combustion engine (ICE) companies including General Motors Co GM, Ford Motor Co F, Toyota Motors Corp TM and others might be hurt by the new law.
The new law also prevents automakers from forcing certain price points on their franchised dealers. This part of the law could take on Ford, which saw dealerships markup Ford F-150 Lightning vehicles due to demand and costs. InsideEVs said Ford has also planned to adopt “no-haggle pricing” next year.
“We value our relationship with our Florida dealers and will continue to support our customers while remaining compliant with Florida law,” a General Motors spokesperson told InsideEvs.
Related Link: Taking On Elon Musk, This State Legislature Could Ban Electric Vehicle Sales By 2035
Why It’s Important: In the highly competitive electric vehicle market, getting costs down compared to traditional vehicles remains one of the biggest potential scaling factors.
Originally, the new law was seen as a big blow to companies like Tesla due to its focus on taking on the DTC model. The new carve-out and inclusion of companies with existing plans could be a huge win for Tesla compared to what other states are doing.
States such as New York and New Mexico have banned DTC sales without using the franchise model. Tesla has circumvented these rules by opening several dealerships and service locations on Native American tribal land.
The new law signed by DeSantis comes a month after he signed the Spaceflight Entity Liability Bill into law. Under the terms of SB 1318, spaceflight customers will have to sign a waiver prior to launch to release companies from liability in the event of injury or death.
This law benefits SpaceX, another company owned by Musk.
Photo: Shutterstock
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