JACKSON, Miss (AP) — Mississippi Governor Tate Reeves signed a bill Tuesday that restricts electric car manufacturers from selling vehicles in person unless they open franchised dealerships.
Defying calls from some fellow Republicans in the legislature to veto the measure, Reeves introduced House Bill 401 introduced by Senatobia Republican Representative Trey Lamar. The law forces electric car companies such as Tesla and Rivian to sell vehicles through franchises rather than store-owning, as they currently operate.
“Nearly 200 small businesses in communities across our state are seeking assurances that major manufacturers can’t just destroy their businesses. That’s fair!” Reeves, a Republican, said in a statement posted on social media. “I also recognize that innovation in this industry is inevitable. And with innovation comes new companies with new business models. I am committed to finding long-term solutions – in a ever-changing market.
The bill does not restrict the sale of electric cars as people can buy them online. But if they want to buy an electric car in person, they must drive to the state’s only Tesla store in Brandon, which is allowed to remain open under the new law. Tesla or any other electric car company would not be able to open a new physical location to sell cars unless they enter into a franchise agreement.
Before the bill passed in a bipartisan vote of 39-13 on March 3, it sparked intra-party debate among GOP lawmakers. Opponents said it would disrupt the auto market and deter electric car makers from bringing new technology and jobs to the state. Proponents said the law would ensure that all automakers, regardless of their business model, abide by the same rules.
Republican Senator Brice Wiggins, a Republican from Pascagoula, had hoped Reeves would veto the legislation. Lawmakers tried to lure Tesla to Mississippi’s Gulf Coast, an area Wiggins called the state’s economic engine.
“In today’s world, if you don’t innovate, you lose. We as a state cannot afford to lose,” Wiggins told The Associated Press on Tuesday. “My vote against the bill was in favor of capitalism, competition and innovation rather than a policy of protectionism.”
Michael Goldberg serves on the Corps for the Associated Press/Report for America Statehouse News Initiative. Report for America is a non-profit national service program that places journalists in local newsrooms to report on undercover issues. Follow him on Twitter twitter.com/mikergoldberg.