There were three different interest groups engaged in the legislative efforts: our dealerships, traditional manufacturers and three electric vehicle (EV) companies (Tesla, Rivian and Lucid). The need for HB 401 has been misunderstood by a lot of people. The electric vehicle companies made the argument that car dealers were anti-EV, and HB 401 would block Mississippians from being able to buy their vehicles. This, of course, was clearly a false narrative. The fight was never about blocking EV companies from selling their vehicles or coming to Mississippi. The legislation was needed to address the loophole that Tesla created when they came to Mississippi and circumvented 50 years of franchise law. In 2019, Tesla filed for a dealer and manufacturer’s license at the Mississippi Motor Vehicle Commission (MMVC). The Commission informed Tesla that they could not have a dealer’s license because the law requires a bona fide contract between the dealer and manufacturer as part of the application. The next step Tesla took was to form a strawman company (Tesla Mississippi, LLC) with the Secretary of State. After doing so, they contracted with themselves as a manufacturer and filed an application for a dealer’s license at the Commission under Tesla Mississippi, LLC. The Commission turned to Attorney General Lynn Fitch for an opinion on whether Tesla’s actions were permissible under the franchise law. In essence, could Tesla contract with themselves to receive a dealer’s license? In short, Attorney General Fitch opined that Tesla’s actions were not in violation of the law. Attorneys for MADA, as well as other legal scholars, believe that the Attorney General’s opinion was flawed. After the MMVC received the opinion, they granted the dealership license to Tesla Mississippi, LLC. Within a few months, 50 years of franchise law was destroyed. Mississippi was the only state in the country where any automobile manufacturer could form an LLC and contract with themselves to receive a dealer’s license. This created a disastrous precedent, and the future of Mississippi’s dealerships was at stake. Dealers go out and compete for customers every day for sales and service, but there is no way a dealership could survive if a factory opened a dealership across the street in direct competition. Mississippi would lose without locally-owned car dealerships. The franchise law has been good for Mississippi. One of the key staples of the franchise law is to prevent monopolies. The law has created small businesses across the state to serve the essential transportation needs of Mississippians. It is independently documented that customers save hundreds of dollars on the purchase of a new automobile when dealers 9
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