Direct sales of EVs are a silver bullet for manufacturers, not customers | Opinion

We appreciate and share the interest in increasing EV adoption amongst Washingtonians, as expressed in The Seattle Times’ editorial titled, “Let EV startups join Tesla in selling cars directly to WA buyers.”

However, the article reflects a misunderstanding of the broader implications of direct sales, and fails to contend with the true impediments to EV adoption. The lack of widespread charging infrastructure, consumer concerns over affordability, and public ambivalence about new technology are the greatest obstacles to EV adoption — not the ban on direct sales.

The fight over direct sales is not about EVs. Franchised dealers offer dozens of EV models, as well as hybrids and plug-in hybrids, at various price points. This fight is about the consolidation of the automotive industry to maximize profits for multi-billion-dollar manufacturers.

As we’ve seen with Amazon’s meteoric rise and the decline of local brick-and-mortar businesses, concentration of corporate power comes at a high price — the brunt of which is borne by local businesses, their employees, and small communities. Franchised dealers employ roughly 21,000 Washingtonians in over 70 towns and cities, accounting for nearly $2 billion in annual payroll for workers and their families.

Due to the advent of the internet, current laws do not hinder EV sales in any meaningful way. For example, Rivian cannot sell directly in Washington, but this state is that company’s number two sales market in the country, behind only California and ahead of every other state that permits direct sales. Texas requires all vehicles to be sold through local dealers, yet it remains Tesla’s third largest retail market. Therefore, contrary to the erroneous claims by direct sales proponents, consumers are not deprived of “choice” or prevented from acquiring EVs.

It simply means that, to sell in person to Washington residents, large manufacturers must use independent retailers who are invested in their communities and accountable to state and local government. Licensed vehicle dealers are governed by comprehensive regulatory regimes set up to protect consumers and ensure oversight.

The biggest beneficiaries of bypassing decades of consumer protection law to allow manufacturers to sell directly are not consumers but risky tech startups selling luxury vehicles. These startups are seeking to cut corners to avoid developing the facilities needed to effectively serve vehicle owners.

Over the objections of franchised dealers, in 2014 Tesla obtained an exemption from Washington’s direct sales ban due to the novelty of its EV. Ten years on, the novelty has worn off and Tesla has made virtually zero investment in sales and service facilities outside of the major urban centers near Seattle and Spokane, despite having customers all around the state. Similarly, Rivian and Lucid have demonstrated no interest in or plans to serve customers in a broader market.

Rivian is the primary promoter of the direct sales bills currently before the Legislature. Rivian claims that allowing it to circumvent the franchise system is necessary to increase EV adoption in Washington. That is simply untrue. Today, EVs can be purchased and serviced at most of the nearly 300 franchised dealerships around the state.

Rather than spending money to change the law, Rivian should follow the same rules as everyone else in the industry.

Franchised dealers are ready, willing, and eager to provide EVs and other clean vehicles to Washington drivers. Creating special legal exceptions for a few luxury car startups is not the answer for consumers or our communities.

This column was submitted by Gene Johnson, Dealer Principal, Rainier Dodge, Olympia; Kelly Levesque, Dealer Principal, Capitol City Honda, Olympia; Heidi Pehl, Dealer Principal, Volkswagen of Olympia; Bruce Titus, Dealer Principal, Olympia Nissan Chrysler Jeep; Jamie Will, Dealer Principal, Titus-Will Hyundai, Olympia and Titus-Will Chevrolet Cadillac, Olympia.