Gas prices soar, Alabama denies our rights

Alabama monument I-20 rest station near Georgia
Alabama monument I-20 rest station near Georgia–“We dare defend our rights.”

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.

Several states like Colorado and Michigan have updated direct sale laws or worked out agreements to stop this misuse that is giving a monopoly to third-party dealers. But not Alabama.

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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Invite David to speak for free to your group about how we can have a more prosperous metro Birmingham. dsher@amsher.com.

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10 thoughts on “Gas prices soar, Alabama denies our rights”

  1. In my opinion, we have a long way to go be an all-electric society. I don’t understand the sudden push for everyone to buy an electric car. I drive a Toyota Rav 4 Hybrid and get the best of both worlds.

    1. Oil companies have perpetuated many myths about electric vehicles. The battery industry is working on a closed loop system. Eventually there will be enough used batteries to “mine” the minerals to make new batteries.

      https://insideevs.com/news/564366/jb-straubel-battery-recycling-profitability/amp/

      The best current example are the lead acid batteries used in cars and commercial equipment. Ninety-nine percent of current lead acid batteries are recycled because it’s much more economical. The same is in process for EV batteries.

      https://www.recyclingtoday.com/article/battery-council-international-lead-battery-recycling/

      Many companies are setting up battery production in the US like Tesla’s partner Panasonic in Nevada.

      https://electrek.co/2021/02/05/how-the-us-plans-to-capture-the-ev-battery-market/amp/
      A “coal powered” EV is cleaner than a car powered by gasoline. Mainly because coal plants are much more efficient than petroleum powered vehicles. In addition, the electric grid continues to get cleaner as renewables are added.

      https://www.greencarreports.com/news/1121222_dont-worry-about-coal-electric-cars-are-still-cleaner

  2. David, this is an excellent article and long overdue point to be made to our state legislators. As a Tesla owner who recently needed a 5 minute repair, I had to schedule an overnight trip to Georgia. Just nuts. We need more free market principles when it comes to EVs.

  3. Where are the batters made. Mining of lithium is a nasty process. (China). Where does the electricity come from? Electric cars are coal powered.

  4. Car dealerships derive the vast majority of their profit from parts and service. Electric vehicles need very little maintenance, and there is far less failure rate. Unless the traditional car manufacturers charge for all updates, and assign that revenue to the dealer where the car is geographically located, it will be challenging to be a car dealer (look at their overhead). I would not be surprised to see the traditional manufacturers buying their dealerships over time. If this were to happen, and Alabama sticks to the laws described in this article, we will have very few dealerships to buy cars in this state. The law has not stopped people in Alabama from buying Tesla cars. The law has stopped Tesla investing in Alabama real estate for their service centers and employing Alabamians to work there. Would lack of a service center or showroom stop me from buying a Tesla? No it wouldn’t.

  5. Welcome to America, the land of formerly free and home of the formerly brave. Just try to charge someone to cut their hair or do just about any other service without getting permission from more than one government (licenses). And, forget about starting a new nursing facility for the elderly. Richard Scrushy got convicted of trying to bribe his way around those roadblocks. To get a Certificate of Need to serve the elderly, your competitors even get to object to letting you compete with them.

  6. Let’s defend our rights in this country to ramp up production of Oil, natural gas & coal. We used to be – as recently as 2020 energy independent. I’m for your right to drive electric & my right not too.

  7. You’re finally figuring out nice thoughts like “we stand for our rights” are just words, empty vessels. Things forgotten when the dollar bill is involved. Why is this the way it is? Because of the auto lobby. Because money from the car industry paid politicians to ensure we don’t get things like a Tesla dealership. Alabama has a lot of auto industry money floating around, so its not really a mystery why we have problems like this.

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