Bill would let Rivian sell electric vehicles directly to Georgians

New legislation in the state Senate would allow the electric-vehicle company Rivian to sell its trucks directly to Georgians, bypassing traditional car dealers. (Hyosub Shin / Hyosub.Shin@ajc.com)

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New legislation in the state Senate would allow the electric-vehicle company Rivian to sell its trucks directly to Georgians, bypassing traditional car dealers. (Hyosub Shin / Hyosub.Shin@ajc.com)

Gov. Brian Kemp has already asked the state to spend $125 million on land and training costs for the new Rivian electric-vehicle plant, and now senators have filed legislation to let the company sell its trucks directly to Georgians.

The measure, Senate Bill 398 — sponsored by Sen. Ben Watson, R-Savannah, and co-sponsored by Sen. Burt Jones, R-Jackson — sets up a high-stakes battle between electric-vehicle companies and the politically powerful Georgia auto dealership lobby.

It also could pit Jones, who is running for lieutenant governor with former President Donald Trump’s blessing, against one of his opponents, Senate President Pro Tem Butch Miller, R-Gainesville, a car dealer who has received huge financial backing from the industry. Jones’ family also owns car dealerships.

While the full details of the incentive package are still under wraps, Kemp’s spending blueprint released earlier this month calls for $112 million for land acquisition and development at Rivian’s sprawling East Atlanta Mega Site.

An additional $6.2 million would finance the design of a Quick Start training and recruitment facility, modeled after the center that the state operates at the Kia Motors plant in West Point. About $5.4 million would go toward “customized training and recruitment operations” to bolster the state’s growing electric-vehicle industry.

That’s just a part of the overall package that helped the state land Rivian, which promises to bring at least 7,500 good-paying jobs to the plant and generate thousands of spinoff positions.

Rivian has lobbied in recent years for legislation to allow it, and other electric-vehicle companies, to sell their cars and trucks directly to consumers in Georgia without going through a local auto dealer.

Legislation to allow such sales stalled In the House last year.

Tesla put on a strong lobbying press to get lawmakers to approve legislation in 2015 to let it sell its cars without going through local dealers. But that bill also limited Tesla to five locations statewide.

The company’s dealer-free business model sparked legislative fights across the nation, pitting Tesla against franchise car dealers — represented in Georgia by the Georgia Automobile Dealers Association — that have been protected by state laws giving them exclusive rights to sell new vehicles.

The new electric-vehicle manufacturers say auto sales of all types at franchise dealers have skyrocketed since the Tesla bill passed. That, they say, shows Tesla’s direct sales haven’t put car dealers out of business.

But car dealers — many of whom sell less-expensive electric vehicles made by big manufacturers such as Nissan — fear allowing builders to peddle their autos directly to consumers would cost dealership jobs. And they say electric-vehicle manufacturers wouldn’t do local maintenance on the autos they sell.

The Georgia Automobile Dealers Association says the state’s dealer model — which employs tens of thousands of Georgians — provides added protections for consumers, such as helping to deal with manufacturer recalls.

Lawmakers who have supported the association said auto dealers have been the “backbone of the automobile industry for decades”

After the Rivian deal was announced in the fall, Lea Kirschner, CEO of the dealers association, said, “Georgia’s franchise automobile dealers and the more than 70,000 Georgians employed by dealers and their suppliers throughout the state look forward to working with Rivian to deliver their electric vehicles to consumers, when they become available, under Georgia’s existing franchise dealer laws.”

Rivian officials have responded by pointing to their planned $5 billion investment in the Georgia plant and the jobs the company would create, saying lawmakers need to give consumers more choices when buying cars.

“Dealerships and their lobbyists stand against this effort by blocking a fair and open EV market that empowers Georgia consumers,” said James Chen, vice president of public policy at Rivian.

The Senate bill would allow electric-vehicle manufacturers to open unlimited locations to sell their autos — not just the five allowed for Telsa — but only if they don’t currently have sales agreements with traditional car dealerships. In other words, companies — such as the big automakers — who sell their vehicles through auto dealers in Georgia now wouldn’t be able to open their own sales facilities.

The bill would also say the electric-vehicle companies would have to provide maintenance services for their autos here, something several lawmakers have voiced concerns about in previous versions of the bill.

“Rivian is bringing an unprecedented multibillion-dollar investment to Georgia in order to create 21st century jobs and further America’s technology leadership,” Chen said. “It is time for Georgia’s leaders to support American jobs and empower consumer choice by passing HB 398.”

The auto dealers knew the legislative fight was coming even before the Rivian deal was formally announced. When The Atlanta Journal-Constitution wrote in November about possible incentives that Rivian might seek, it mentioned the current sales law that forces manufacturers to sell its cars through Georgia dealerships.

The association’s Kirschner said: “Georgia’s franchise dealer model is enshrined in state law to serve consumers, keep dollars local and preserve competition.

“It shouldn’t be changed for out-of-state companies seeking an unfair entry into the Georgia new vehicle market, even if they choose to build a manufacturing facility in the state.”