What We’re Reading
Tesla loses bid to overturn Louisiana’s ban on direct car sales (Reuters, June 16, 2023)
Tesla continues to challenge state dealer franchise laws restricting direct-to-consumer vehicle sales, with mixed results. As noted below and previously, some states have rolled back their laws for Tesla and other EV manufacturers who have eschewed the traditional dealer model to sell directly and online. But Louisiana will not be joining that list, at least not for now. Last Friday, a federal court blocked Tesla’s challenge to a Louisiana franchise law, granting the State’s motion to dismiss and finding the state’s “direct sales ban applies equally to all manufacturers, and Tesla has alleged no facts regarding anti-Tesla animus on the part of the Louisiana Legislature.” The Court’s full decision can be accessed here.
Florida bans direct-to-consumer auto sales but leaves carve-out for Tesla (CBS News, June 16, 2023)
While Tesla struck out in Louisiana, EV manufacturers seemingly scored a major victory in the direct-to-consumer fight last week when Florida Governor Ron Desantis approved HB 637. The new law bans legacy automakers like Ford and General Motors from offering direct-to-consumer or online sales options if the company already sells vehicles in the Sunshine State through existing dealerships, but it contains an exception for EV makers like Tesla that do not already market and sell vehicles through independent dealerships in Florida. The law, which takes effect July 1, appears to be the first to uniquely and intentionally create a competitive advantage for Tesla and other similarly situated manufacturers.
Volvo CEO Jim Rowan on the Toughest Challenge Facing Automakers (Time, June 18, 2023)
When Jim Rowan took over earlier this year as CEO of Volvo, the Swedish automaker had already committed to electrification and automotive innovation. But Rowan brings an “outsider’s perspective”—with a history of running non-automotive, tech-forward companies like Blackberry—and says in this interview that the biggest challenge for automakers right now is “integrating more and better technology into cars: the kind of computing power that will bring about more advanced assisted driving features, digital connectivity, and allow auto companies to take advantage of the vast amounts of data they can start collecting.” Rowan adds the “auto companies that get this right, and come out as leaders, I think will become some of the biggest tech companies of the next decade or two decades, even.”
Still, Rowan sees full autonomy as still very much a thing of the future, due in large part to regulatory and infrastructure challenges. Like Mobileye’s leadership, Rowan rejects the classic five levels of autonomy, preferring to think instead in terms of “two levels: hands on the steering wheel, eyes on the road, and hands off the steering wheel, eyes on the screen,” because “[a]nything else is confusing for the customer.” The latter, he says, is likely many years away on a widespread basis.
Read the full interview for more of Rowan’s thoughts on the future of Volvo; its newest and most affordable EV, the EX30; industry challenges; and the value of government incentives.