Jacoby Featured on Regulatory Barriers to EV Direct Sales
Daily Journal
Automotive & Transportation Group Chair Aaron Jacoby was featured by Daily Journal on the wave of legal and regulatory conflict stemming from electric vehicle (EV) manufacturers’ trend toward direct-to-consumer sales, a move that is rocking the automotive industry.
The core conflict is tension between legacy franchise laws, which protect dealer networks, and the growing appeal of direct sales.
Aaron said, “An automaker such as [General Motors] cannot legally sell director to consumers because doing so would place it in competition with its own franchised dealers – an antitrust and unfair competition problem that California law also expressly prohibits.”
To circumvent those laws, some manufacturers are debuting what they distinct brands that don’t fall under franchise laws. Volkswagen claims its EV brand, Scout, is a district brand, whereas dealers content that it’s instead an extension of Volkswagen’s main brand.
Aaron said, “The opposing argument is stronger. Scout is effectively another VW model, rebranded to circumvent the franchise laws that would otherwise bar VW from competing with its deal network.”
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