New Law in Mississippi Limits Direct Sales of Electric Vehicles

Credit: Dylan Hollingsworth/Bloomberg (Getty Images)

Mississippi Governor Phil Bryant has signed a new law that bans direct in-person sales of electric cars, requiring instead that all sales go through traditional dealerships. The move means that electric car manufacturers such as Tesla, Rivian, Lucid, and others will no longer be able to sell their vehicles directly to consumers in Mississippi.

While the new law was opposed by some Republican lawmakers in the state who called for a veto, it ultimately passed with overwhelming support from both Republican and Democratic legislators. Supporters of the law argue that it will protect consumers by ensuring that all car sales are subject to the same regulations and consumer protections as traditional dealerships.

Today, I signed HB401 to restore MS’s auto dealer franchise law back to how it had been interpreted for the last 50 years. Almost 200 small businesses in communities across our state are seeking assurances that big manufacturers can’t just destroy their businesses. That’s fair!

— Governor Tate Reeves (@tatereeves) March 14, 2023

Under the new law in Mississippi, carmakers are allowed to make direct sales in two ways. Firstly, through online sales as H.B. 401 doesn't regulate digital storefronts. Secondly, companies that own only one dealership and have held a dealer license since August 2021, and exclusively sell electric vehicles, can continue their business unimpeded. This exception seems to apply to only one establishment, the Tesla store in Brandon, Mississippi.

​Critics of the law, however, argue that it is a protectionist measure designed to prop up traditional dealerships and limit competition, and that it will ultimately harm consumers by limiting their choices and increasing prices. Mississippi is not the only state to have banned direct sales of electric cars; other states, including Texas and Michigan, have similar laws in place.
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Electric car manufacturers have fought against these laws in court, arguing that they are unconstitutional and anti-competitive, but so far they have been unsuccessful in overturning them.

The debate over direct sales of electric cars is likely to continue, as more and more consumers turn to electric vehicles and traditional dealerships seek to protect their market share. As the electric car industry continues to grow, it remains to be seen whether states will continue to ban direct sales or whether they will embrace new models of car sales that offer consumers more choice and competition.
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It is important to note that laws and regulations surrounding electric car sales can change over time as political and economic factors shift. If you have questions or concerns about electric car sales in your state, it is best to consult with local experts or government officials for the most up-to-date information.