By David Sher
“We dare defend our rights.”
Yes, that is our Alabama motto.
But we don’t seem to be given those rights in Alabama.
As gas prices surge, I’ve gotten interested in owning an electric car.
And I’m getting sick and tired of the U.S. being pushed around by Russia, Iran, Venezuela, and other oil rich countries.
I really like the American made Tesla Model 3—a more affordable Tesla electric vehicle.
I’ve found, however, I can’t actually buy a Tesla or several other electric car brands in Alabama– nor can I have them serviced within the state.
My only options appear to be to buy a Tesla on line or drive to Atlanta– the nearest showroom.
According to Wikipedia, Alabama is one of only ten states that has implemented a complete and total direct sales ban on manufacturers selling new cars to the public.
And of those ten states, we are only one of three states that also bans manufacturers from owning service centers.
Although major repairs are rare for electric cars, this can force Alabama-based Tesla owners to drive or tow their vehicle to Atlanta to be serviced.
Even the Federal Trade Commission recommends allowing direct manufacturer automobile sales, saving consumers thousands of dollars on a new car.
Let’s face it, no one enjoys the process of buying a new car from a dealership.
And it’s gotten worse with new car shortages. Many car dealerships are now gouging consumers by charging thousands of dollars over sticker price. According to CNBC, 82% of consumers are currently paying above sticker price—compared to .3% in early 2020.
Our Alabama conservative state government prides itself on individual rights and limited government interference. That is true for all products except the purchase of electric car (EV) brands like Rivian, Lucid, Tesla and others.
New cars are expensive and considered as one’s second-biggest purchase after a home. With so much at stake for consumers, one would think that consumers should actually have a lot of choices when it comes to how they wish to buy a new vehicle. They don’t, when compared to other products.
Virtually any item can be bought through multiple channels in Alabama. For example, one can purchase Apple products online directly or in person from an Apple store. In addition, these same Apple products can be acquired from companies like Best Buy, Amazon, Target and many other places.
Nike and Levi’s are other examples of companies selling direct to the consumer and through other companies. Wineries are allowed to sell direct to the consumer according to Alabama law. Homes and real estate have multiple sales channels. Even companies like Carvana and Vroom can legally sell used cars direct to car buyers.
How did we evolve to this sorry state of affairs?
The dealership model for automobile sales has been around for nearly a century. Its original implementation was appropriate and worked well. Laws were established to protect small fledgling dealers from large well financed manufacturers competing unfairly against them and putting them out of business.
You might want to make a case for your local car dealership, but one by one, many of these locally owned dealerships are being sold to multibillion-dollar car dealerships. Many of our dealerships aren’t locally owned family businesses any more. The dealerships are co-opting the franchise laws and lobbying state legislatures to use old dealer franchise laws to limit the free market and consumer choice.
The new electric vehicle manufacturers such as Lucid, Rivian and Tesla have never had dealerships. Therefore, franchisee laws protecting dealers should not apply. They are being blocked from selling their cars directly to the car buyer.
We in Alabama are supposed to be about freedom and choice.
We dare defend our rights!
David Sher is the founder and publisher of ComebackTown. He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).
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