The landscape for electric vehicle (EV) sales is changing rapidly. In the past, new vehicles were traditionally sold through dealer franchises. However, as more and more automakers enter the EV market, they are starting to sell their vehicles directly to consumers. This is a direct challenge to the dealer franchise model, which has been in place for decades. Auto “dealer franchise laws” are state and federal laws that regulate the relationship between automakers and dealerships. These laws are designed to protect dealerships from unfair treatment by automakers and to ensure that consumers have access to a wide variety of vehicles and services.

Why are automakers moving towards direct sales?

There are a number of reasons why automakers are moving towards direct sales. First, it allows them to control the entire sales process, from pricing to delivery. This can help them to improve their margins and ensure that their vehicles are priced competitively. Second, direct sales can help automakers to build a stronger relationship with their customers. By selling directly, automakers can collect data on customer preferences and use it to improve their products and services. Manufacturers including Tesla, Rivian and Lucid are pushing for the Online Sales structure.

How are dealer franchises fighting back?

Dealer franchises are fighting back against the direct sales model. They argue that it is unfair to allow automakers to sell their vehicles directly to consumers, while they are forced to operate through dealerships. 

Car dealers are protected from direct online sales by state laws known as “dealer franchise laws.” These laws vary from state to state, but they generally require automakers to sell their vehicles through independent dealerships. They also argue that direct sales will lead to a decline in customer service and satisfaction.

How will franchise dealerships compete?

In order to compete with direct sales, dealer franchises will need to focus on providing excellent customer service and offering a wide range of services, such as financing and maintenance. They will also need to find ways to differentiate themselves from online retailers.

Will dealer franchises lose their long-standing protection?

It is unlikely that dealer franchises will lose their long-standing protection. However, they will need to adapt to the changing landscape in order to survive.

Here are some of the arguments that car dealers use to support dealer franchise laws:

• Dealerships provide jobs and economic benefits to communities.
• Dealerships offer consumers a wider variety of vehicles and services.
• Dealerships provide consumers with the opportunity to test drive vehicles and get expert advice from salespeople.
• Dealerships provide consumers with a warranty and service after the sale.

Here are some of the arguments that automakers use to support direct sales:

• Dealerships add unnecessary costs to the purchase of a vehicle.
• Dealerships sometimes have the reputation for unfair and deceptive practices.
• Consumers have the right to buy a vehicle directly from the manufacturer.
• Direct sales will lead to lower prices and more choices for consumers.

What does the future hold for EV sales?

It is still too early to say how the battle between automakers and dealer franchises will play out. However, it is clear that the landscape for EV purchases is changing. It is likely that we will continue to see a mix of direct sales and dealer sales in the foreseeable future.

Which buying experience do you prefer?

Whether you prefer to buy an EV online or through a dealer is a personal decision. Some people prefer the convenience of buying a car online, while others prefer to see the car in person and talk to a salesperson. There are pros and cons to both options.

The battle between automakers and dealer franchises is a complex one. There are valid arguments on both sides. Ultimately, the decision of whether to support direct sales or dealer franchises is a personal one.

Go electric ✌️