DeSantis Blocks Direct-To-Consumer Car Sales For Most Brands, But Not Tesla [UPDATE]

Update: Added responses from Ford, Stellantis, and information from the Alliance for Automotive Innovation at the end of this article.

The Florida Senate passed House Bill 637 and Governor Ron DeSantis has signed it into law. The measure effectively blocks automakers from bypassing dealerships to sell vehicles directly to consumers, but the law doesn't apply to all companies. In short, if automakers didn't have deals with independent dealers in the state before the law, they can sell direct.

Specifically, here's the exact language from page 13 of HB 637:

A licensee, a manufacturer, an importer, or a distributor, or an agent of the licensee, manufacturer, importer, or distributor, or a parent, a subsidiary, a common entity, an officer, or an employed representative of the licensee, manufacturer, importer, or distributor, may not directly or indirectly own, operate, or control, by contract, agreement, or otherwise, a motor vehicle dealership for any line-make in this state if the licensee, manufacturer, importer, or distributor has manufactured, imported, or distributed motor vehicles of any line-make which have been or are offered for sale under a franchise agreement in this state with an independent person.

Any person who is not prohibited by this section from owning, operating, or controlling a motor vehicle dealership may be issued a license pursuant to s. 320.27.

To paraphrase that, manufacturers cannot have a license to directly own a dealership if said manufacturer already has franchise agreements in place. This puts the kibosh on legacy automakers selling directly to consumers through factory stores, and such laws are found in other states. However, those laws generally block all brands from direct-to-consumer sales. The language in Florida's law leaves the door open for companies that don't have franchise agreements to sell directly, no fuss no muss. 

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That seemingly gives a big advantage to EV brands like Rivian, Lucid, and Tesla. Under the law, Tesla could sell a Model 3 directly to a buyer at a fixed price without a middleman whereas a Mustang Mach-E would incur retail pricing from a dealer. Furthermore, HB 637 prevents automakers from forcing franchise dealers to sell vehicles at a specific price, and manufacturers must maintain vehicle allocations to dealerships consistent with previous levels.

This seems to curtail automaker efforts to prevent excessive dealer markups on popular vehicles by reducing future allocations for dealers that don't comply with automaker requests. Casting a specific eye towards Ford, the law also conflicts with the company's plan to adopt no-haggle pricing starting next year.

Automakers And The Law:

Hyundai Taking Advantage Of EV Tax Credit Loophole

Will Auto-Dealer Protection Laws Stifle Electric Car Adoption?

We've contacted Detroit-based automakers regarding the law. A spokesperson for General Motors emailed the following statement:

"We value our relationship with our Florida dealers and will continue to support our customers while remaining compliant with Florida law."

Representatives for Stellantis and Ford declined to comment, instead referring us to the Alliance for Automotive Innovation. In a letter to DeSantis from May 3, the Alliance requested a veto of HB 637 on numerous grounds, stating it "undermines the free market by statutorily guaranteeing revenue for auto dealers" and "solidifies two different regulatory systems for competitors in the same market," among other things. Obviously, DeSantis didn't veto the legislation.

A PDF of the letter is available to view at this link from Alliance for Automotive Innovation website.