Makers of EVs say bill could be draining
Lawmaker: SB 512 about legacy franchise dealers
State lawmakers are considering legislation that has caused controversy at the state Capitol between supporters of the bill and electric vehicle manufacturers who sell their cars without a franchise dealership model.
EV manufacturers like Tesla and Rivian say Senate Bill 512 could prevent them from servicing their vehicles and selling directly to Oklahoma customers. A previous version of the bill would have given locally owned franchise dealers a monopoly on new vehicle sales and service, they said, by forcing them to operate like the legacy auto manufacturers.
The bill’s author, however, believes his legislation can be amended to prevent the situation that electric vehicle manufacturers worry about.
“They will be held harmless by this,” said state Rep. Mike Dobrinski. “There will be no change from the status quo of where EVs operate now.”
A different model
Like many states, Oklahoma does not allow car manufacturers to operate stores where customers can buy and drive away a new car. Instead, they’re run by independent business owners who sign agreements with companies like Ford and Chevrolet.
When it entered the market, Tesla rejected the franchise dealership model and instead began selling most of its cars directly to customers with online ordering. Because of state law, Oklahomans who want a Tesla have to order the car online and either pick it up out of state or use a third-party transport service to bring it here.
Tesla also opened its own nonfranchise service centers, including
ones in Oklahoma City and Tulsa. Those sites double as a “gallery” where potential customers can see the cars, but not drive them.
Another EV company, Rivian, has a similar business model. In a letter to lawmakers, Rivian said an earlier version of the bill would have prevented it from operating here in the future. The company hasn’t taken a stance on the latest amendment yet, however.
The Oklahoma Automobile Dealers Association, who requested the bill be heard, said its goal was to protect franchise dealers from manufacturers by making it easier to designate a successor business and to establish a reasonable timetable for facility upgrades.
“It will not affect the ability of consumers of what are considered nonfranchise automobile manufacturers to get service and warranty work done in Oklahoma,” said OADA President
Peter Hodges. “And it will not limit overthe-air updates for consumers on safety updates and bug fixes.”
Legislative process
The proposed law has gone through several revisions since it was introduced early in this year’s legislative session. It was previously attached to a different bill that died when it didn’t get a hearing on the House floor.
This version was added to a Senate bill that recently passed through the committee process and now awaits its own hearing in the House.
Dobrinski, the author of both bills, acknowledged that although it wasn’t his intention, earlier versions threatened to shut down Tesla’s operations in Oklahoma. He said his goal was to protect existing franchise dealerships from manufacturers, and also to put nonfranchise, manufacturer-owned service centers under regulation from the Oklahoma Motor Vehicle Commission.
“You’ve got EVs coming in here now that want to sell direct, and then doing so without any regulation,” said Dobrinski. “I know they’ve been in the state for a long time, but they have been and are currently successfully serving their customers without any licensing or regulation from the (Oklahoma) Motor Vehicle Commission.”
The most recent amendment to Senate Bill 512 includes language recommended by Tesla, he said. “I want to be able to let everybody know that what we’re moving forward here with are changes and improvements in the position of franchise dealers in relation to their own legacy manufacturers, and it has zero effect on EVs in Oklahoma.”
The bill must be heard on the House floor by April 28 to remain alive in its current form.
Staff writer Dale Denwalt covers Oklahoma’s economy and business news for The Oklahoman. Have a story idea for Dale? He can be reached at ddenwalt@oklahoman.com or on Twitter at @denwalt. Support Dale’s work and that of other Oklahoman journalists by purchasing a digital subscription today at subscribe.oklahoman.com.