Trending
DeSantis Exempts Elon Musk’s Tesla From Florida Car Sales Law
Florida Governor Ron DeSantis has signed a law banning automakers from selling cars directly to consumers in Florida, but it contains a carve-out that will benefit Elon Musk and his Tesla company.
A carve-out is the partial divestiture of a business unit in which a parent company sells a minority interest of a subsidiary to outside investors
House Bill 637 requires most automakers to sell to Floridians through third-party car dealers, who sometimes add exorbitant markups to vehicles’ sales tags.
Drafted by lobbyists for dealers, who have made substantial donations to DeSantis, the law would have been a huge blow to Tesla, which is owned by Elon Musk.
Tesla does not involve 3rd party dealership, by operating its own dealerships. Forcing it to use third-party franchises would have undermined Tesla’s business model.
Conveniently for Tesla, language was added to the new law exempting automakers without existing franchise agreements from its requirements. While Tesla is the chief beneficiary of the carve-out, other upstart electric vehicle makers such as Rivian, which sells direct to customers online, also benefits from this.
You must be logged in to post a comment Login