DeSantis hits the brakes on direct-to-consumer auto sales

by | Jun 19, 2023

  • Gov. Ron DeSantis has signed House Bill 637 into law, imposing restrictions on automakers but providing exceptions for electric vehicle manufacturers.
  • The law prohibits manufacturers like Ford and General Motors from selling vehicles directly to consumers or offering online sales if they already operate dealerships within the state.
  • Electric vehicle manufacturers like Rivian, Polestar, Lucid, and Tesla are granted direct sales privileges if they do not have independent dealerships.

Gov. Ron DeSantis has signed House Bill 637 into law, which places restrictions on automakers while offering exceptions for electric vehicle (EV) manufacturers.

Under the law, manufacturers like Ford and General Motors are prohibited from directly selling vehicles to consumers or offering online sales if they already operate dealerships within the state. The measure, however, grants direct sales privileges to EV-focused companies like Rivian, Polestar, Lucid, and Tesla, provided they do not possess independent dealerships.

Manufacturers are also restricted from factoring the number of pre-ordered or reserved vehicles by consumers when allocating vehicles to dealers. Moreover, the bill prohibits manufacturers from owning, operating, or controlling a dealership for a specific line-make if it is already offered for sale in Florida through a franchise agreement with an independent seller.

The legislation also introduces provisions allowing licensees to sell certain motor vehicle features or improvements through remote electronic transmission. Under specific conditions, licensees must pay dealers at least eight percent of the payment received.

Distributors and affiliates are further barred from obtaining a motor vehicle dealer license or operating a dealership that sells or services vehicles distributed by the distributor’s line-make.

Florida’s legislation stands out due to the exceptions it carves out for certain companies, setting it apart from states like Louisiana, New Mexico, and Texas, which have outright bans on direct vehicle sales without exemptions.

Tesla, the leading electric car manufacturer, has been actively challenging similar bans in various states and currently retains the right to sell directly to customers in Delaware and Michigan. The Capitolist attempted to make contact with Tesla representatives, but the EV manufacturer did not immediately respond.

Critics of the new law argue that it creates an uneven playing field between traditional automakers and their EV counterparts. Dealerships are often associated with additional fees that can inflate the final purchase price, potentially giving an advantage to EV makers who can offer direct sales.

Meanwhile, proponents of the law, such as the Florida Automobile Dealers Association, which lobbied in favor of the bill, contends that dealerships provide essential benefits, including warranty services, consumer protection, test driving opportunities, and local employment.


  1. King Nether

    DeSantis is not in favor of a free market. This law is heavy-handed regulation of the car market, favoring dealers at the expense of customers.

    • Joseph W Montgomery

      How big of a campaign donation did DeSantis and half of the Florida legislature get from the Florida Automobile Dealers for this?!

  2. Deborah Coffey

    DeSantis is sleazier than Trump! Is that even possible? He certainly has no respect for the people of Florida…unless they’re major contributors to his worthless campaign.

  3. Frank Thompson

    There is no freedom in Florida “the freedom state” for car manufacturers.

  4. wjtinfwb

    Well, it’s not quite so simple. Legacy auto dealers, (Ford, GM, Honda, Toyota, etc.) are FRANCHISED dealers for that brand. They paid a fee to the manufacturer for the right to sell AND service the manufacturer’s product. As you would guess that requires a much greater investment than a website to sell a car virtually. It also provides the dealer and the manufacturer the federal protection afforded by federal franchise law, governed by the Federal Trade Commission (FTC). The FTC has specific regulations around how a manufacturer’s product is distributed when Franchised dealers are in place, protecting the investors and the investment in that dealer. Tesla and other startups don’t have any franchised dealers so they don’t fall under the purview of the FTC. As everyone who reads The Capitolist knows, Federal law generally trumps state law, which is why states like Louisiana took the path of least resistance and just barred direct sales altogether. Florida and DeSantis went further carving out those brands not afforded the FTC protection and permitting their direct sale. Until Federal Franchise laws are changed or nullified, independent franchised dealers of legacy companies will continue to be protected and direct sales forbidden.

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