When I want to purchase something, I go to the company’s website or brick-and-mortar store and buy it. That’s how commerce works. But Senate Bill 1939, which is expected to go before Illinois legislators Wednesday, would make it illegal to buy many electric vehicles in this manner.
Gov. JB Pritzker and many state lawmakers have been effective leaders in the push to modernize transportation. They have brought thousands of well-paying jobs to Illinois, from manufacturing electric trucks in Normal and batteries in Manteno to producing copper for EV batteries and installing and maintaining the state’s rapidly expanding network of 4,400 public charging ports. If they want to guarantee Illinoisans are in the driver’s seat building our electric future, they must vote down the proposed bill.
This legislation would block direct sales from EV manufacturers who have received substantial financial investments from legacy automakers —known as “common entities.” This would prevent independent EV manufacturers from selling cars except through dealer networks with which they have no relationship. If legislators capitulate to large dealership groups by enacting this bill into law, progress toward a secure and prosperous electric transportation future will be stifled.
Consumers with fewer options will be forced to travel out of state to buy or service their EVs. These Illinoisans will pay taxes and generate commission for sales jobs in other states, resulting in fewer auto industry jobs and less revenue in Illinois.
The stated goal of anti-consumer legislation like SB 1939 is to protect the viability of franchise dealerships. While it is true that a healthy dealership sector is important to ensuring consumer choice, the idea that direct sales harm dealerships isn’t true. Data from the National Automobile Dealers Association indicates that franchise dealerships have actually benefited from additional market competition, doing better in states with freedom-to-buy laws than in states that restrict direct sales.
In states that allow direct sales from at least one EV manufacturer, franchise dealerships saw their sales revenue increase nearly 80% between 2012 and 2021. Growth in sales revenue for dealerships in states that prohibit direct sales was 19% lower. Dealership employment saw a similar trend over the same period, growing approximately 40% faster in states that allow direct sales than in states that don’t.
Laws restricting the freedom to buy directly from a vehicle manufacturer were first enacted in the 1940s to protect dealerships at a time when three large domestic vehicle manufacturers dominated the U.S. market. These laws were effective in their original context, but — to state the obvious — a lot has changed in 80 years. The internet allows companies to sell their products online without the need to build stores; a wide variety of manufacturers in the U.S. and overseas now compete in the U.S. market; and many car dealerships have been transformed from mom-and-pop businesses to multibillion-dollar companies that don’t need the same protections to remain successful.
Illinois leaders should reject this anti-consumer legislation, maintaining the freedoms that have helped make the state a national leader in the transition to electric transportation.
Liam Condon, an Illinois resident, works for the Electrification Coalition, a national nonprofit that drives the policies and actions that will accelerate electrification of the U.S. transportation sector.
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