How Dealership Laws Hinder EV Sales

In a piece in The Atlantic, Robinson Meyer calls out antitrust laws that protect U.S. car dealers from competition for preventing the more widespread adoption of electric vehicles. According to Meyer, more than half of U.S. states have laws that prevent automakers from selling directly to consumers—laws that Meyer calls "a major impediment to decarbonizing the American economy."

In 17 states, including Texas, Wisconsin, and Connecticut, laws forbid any automaker from opening a store and selling its vehicles directly to customers. Another 11 states, including New York, New Jersey, and Georgia, allow only one automaker, Tesla, to open stores and sell directly to state residents. If you want to buy a Ford truck, you have to go to a Ford dealership owned by a third-party company.

Meyer writes that restrictions on direct-to-consumer sales are crippling EV sales, pointing to the difference between New York, where the state offers plenty of incentives for buying EVs, with Florida, which does not offer the same benefits but, because of its more permissive dealership laws, saw twice as many electric car sales as New York in 2019 and 2020. Meanwhile, many traditional car dealerships are unprepared to sell EVs, lacking charging infrastructure or knowledgeable staff that can answer buyers' questions.

Now, three major electric car manufacturers have teamed up to wage the legal battles necessary to change these laws. Meanwhile, legacy carmakers are introducing more electric models, which dealerships will have to equip themselves to sell.