Mississippi Stops Tesla and Others from Opening More Stores Unless They’re Franchises

Under a new bill signed on Tuesday by Republican Mississippi Governor Tate Reeves, Tesla could be prohibited from selling its electric vehicles (EVs) in person, unless it opens franchised dealerships (via Fortune).

House Bill 401 forces automakers like Tesla and Rivian to sell vehicles through franchised locations rather than through their personally owned stores. Both automakers operate on a non-franchised model, with the companies owning all of their stores outright.

“Almost 200 small businesses in communities across our state are seeking assurances that big manufacturers can’t just destroy their businesses. That’s fair!” Reeves said. “I also recognize that innovation in this industry is inevitable. And with innovation comes new companies with new business models. I am committed to find long-term solutions—in an ever changing market.”

Tesla buyers in Mississippi will still be able to purchase the EVs online, as the law only prohibits in-person sales through non-franchised locations. Tesla won’t be able to open new sales locations, though users can still drive to Brandon, Mississippi and purchase vehicles there, as the only site exempted from the bill.

Bipartisan opposition to the bill argued that it could slow down innovation from startup EV automakers and companies like Tesla, including Republican Senator Bruce Wiggins.

“In today’s world, if you don’t innovate, you lose out. We as a state cannot afford to lose out,” Wiggins said. “My vote against the bill was a vote for capitalism, competition and innovation rather than for a policy of protectionism.”