Miss. governor signs bill putting new restrictions on how EV-only manufacturers can sell

A Mississippi bill aimed at preventing electric vehicle manufacturers from bypassing franchised dealers to sell their vehicles has been signed into law.

Mississippi Gov. Tate Reeves on Tuesday signed the legislation, which had been approved by the Legislature earlier this month. The new law prohibits vehicle manufacturers from owning, operating or controlling their own dealerships, though it does carve out an exception to that restriction for an existing Tesla outlet in the state. That exception is capped at one location.

Reeves positioned the law as one that would protect Mississippi’s car dealers. “Almost 200 small businesses in communities across our state are seeking assurances that big manufacturers can’t just destroy their businesses. That’s fair!” Reeves wrote Tuesday in a Facebook post after signing House Bill 401. “I also recognize that innovation in this industry is inevitable. And with innovation comes new companies with new business models. I am committed to find long-term solutions — in an ever changing market. I look forward to working with all parties going forward to do just that.”

The law grandfathers in an existing Tesla location, according to the Mississippi Automobile Dealers Association.

“It’s rewarding to know that Mississippi lawmakers recognized the importance of a strong dealership network that we have in our state,” said Marty Milstead, the association’s president.

“There’s one set of rules for all the manufacturers in Mississippi,” he added. “EV companies don’t get to have their own set of rules.”

Startup EV manufacturers such as Rivian and Lucid, which follow Tesla’s model of selling vehicles directly to consumers without a franchised dealership network, have advocated in recent years for exemptions to dealer franchise laws to accommodate their sales model.

“The passage and signing of HB 401 takes Mississippi in the wrong direction on consumer choice and is a loss for both Mississippi’s economy and residents,” Rivian said in a statement provided to Automotive News. “Blocking EV-only manufacturers from investing in the state creates unhelpful restrictions for car buyers and prevents investments that would create good-paying jobs in automotive technology.”