Bill to prevent many electric car dealerships opening in Mississippi heads to governor's desk

JACKSON, Miss. – A bill that could keep the electric car industry from expanding its footprint in the state of Mississippi is now one step away from becoming law, after passing the Mississippi Senate on Thursday.

The legislation now heads to the desk of Republican Gov. Tate Reeves, who has not indicated whether he will sign it.

House Bill 401, which had both bipartisan support and opposition, would clarify the state's franchise laws to say that car companies cannot operate their own dealerships and must instead work with franchisees. That would directly conflict with the business model used by electric car companies like Tesla and Rivian.

Electric car companies could open dealerships in Mississippi if they were willing to change their business models. That said, in a January interview, Rivian's Senior Policy Advisor Beau Whiteman said the company is not going to switch to a franchise model – meaning if Reeves signs the bill into law, Rivian will effectively be barred from opening a dealership in Mississippi.

"Customers in Mississippi will just have to go without a physical presence, and it's to their own detriment," Whiteman said.

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Tesla's existing location in Brandon is grandfathered in and could continue to operate, but the company could not expand its footprint.

What bill's supporters, opponents are saying

State Sen. Jeremy England, R-Vancleave, indicated that he has had conversations with Tesla officials about potentially opening a second brick-and-mortar location on the Gulf Coast, but that this bill becoming law would stop them from doing so.

"I want them to bring their jobs here to Mississippi," England said.

The bill's supporters, like Sen. Daniel Sparks, R-Belmont, say it is intended to ensure legacy car manufacturers and electric manufacturers play by the same rules. Sparks also said the bill would preserve more than 50 years of precedent, under which car dealerships operated as franchises not as direct assets of the car manufacturers.

"If they want to have dealerships in this state, they will have to follow the franchise laws that's been on the books for over 50 years," Sparks said.

However, the attorney general issued an opinion shortly before Tesla opened the Brandon storefront stating that doing so would not violate the franchise laws. This left the legislature divided.

Protectionism or playing by the rules?

Sparks believes that the opinion was wrong, and that it is necessary to clarify the law through this bill. Opponents of the bill, like England and Sen. Joey Fillingane, R-Sumrall, say it is "protectionism" – with the legislature interfering in the free market to lessen the impacts of an emerging industry on existing businesses.

"I think that if we're not careful, because of home cooking rules and wanting to be friends with those who we've been friends with for a long time... we're going to really deprive the citizens of our state of new technologies that everybody in the other 49 states is going to have," Fillingane said. "Out of good intentions or good purposes, we could really deprive our citizens of the ability to have an EV car."

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England compared this move to other hypothetical forms of protectionism that the legislature could have taken when new technologies came to the state.

"If we were here passing a bill to support your local mom-and-pop video store against Netflix by telling Netflix, 'Hey, we're OK with you showing movies to consumers in Mississippi," England said. "We're just telling you you've got to do it by DVD form because that's what we have here in Mississippi, and our mom-and-pop video stores are supporting our local communities' and what not. It sounds silly, but that's what we're doing."

England offered a number of amendments to the bill, including attempts to allow Tesla to open a second location and to make the bill expire after two years. Each of his amendments failed.

After questioning Sparks and offering the amendments, and more than an hour into debate on the bill, England rose to speak in opposition. This drew groans from some of his fellow senators, but England said it was important to make his opposition clear once more – calling it "the worst piece of legislation" he's seen on the state Senate's floor.

Sparks said the public should know that the bill would not restrict individuals from purchasing electric cars online directly from manufacturers, nor does it restrict the manufacturers' ability to open service centers where cars are not sold.

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The bill passed the Senate 38-14, after passing the House 105-9.

The bill would become law on July 1.

Contributing: The Associated Press.

This article originally appeared on Mississippi Clarion Ledger: Mississippi electric vehicle bill passes House, heads to Gov. Reeves