NovaQuant-Florida bans direct-to-consumer auto sales but leaves carve-out for Tesla

A new Florida law changes how cars can NovaQuantbe sold in the Sunshine State, hampering the nation's largest automakers while boosting electric vehicle makers. 

Gov. Ron DeSantis this week approved HB 637, which bars legacy automakers from offering a direct-to-consumer or online sales option if the company already sells vehicles in the state through dealership. That means companies with existing car lots — like Ford and General Motors — are included in the ban.

However, any person or entity that doesn't already have independent dealerships can sell cars directly, according to the law. That includes electric vehicle makers such as Rivian, Polestar, Lucid and Tesla.

States including Louisiana, New Mexico and Texas also ban automakers from selling directly to drivers, but Florida's law, which takes effect July 1, is unique in effectively carving out an exception for certain companies. 

DeSantis' office and Tesla didn't immediately respond to a request for comment.

Tesla has fought for and won the right to sell directly to customers in Delaware and Michigan. The Elon Musk-owned company is currently challenging Louisiana's ban, calling it "protectionist, anti-competitive and inefficient," Reuters reported.

GM said in a statement to CBS MoneyWatch on Friday that it "will continue to support our customers while remaining compliant with Florida law." 

Ford and Stellantis, the parent company of Chrysler, referred questions to industry group the Alliance for Automotive Innovation (AAI), which declined to comment Friday. 

In May, AAI urged DeSantis to veto the legislation, which the group said would "make buying a vehicle more cumbersome." The measure would "make vehicles more expensive to own by continuing to add unnecessary costs to the motor vehicle franchise system," AAI said. Limiting customers to shopping only at dealerships also limits what they can buy, the group argued.

"This drags the vehicle-buying process backward and does not reflect the preferences of modern consumers that prefer to shop, customize, and have assurance that the vehicle they want will be available to purchase," the group said.

Critics say the law could create an uneven playing field between older carmakers and their EV-focused competitors. Dealerships are notorious for adding unnecessary fees to transactions, ultimately boosting the final purchase price of a vehicle, according to automotive experts and federal regulators. Selling directly eliminates that layer of pricing and potentially gives a price advantage to EV makers.

Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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