Tesla, the renowned electric vehicle manufacturer, is embroiled in a legal struggle with Wisconsin authorities over its desire to establish direct-sales dealerships within the state. Despite Wisconsinites purchasing between 3,000 and 4,000 Tesla vehicles annually, these sales currently occur outside Wisconsin due to restrictive "factory store" laws. Tesla has sought an exemption from these laws but faced setbacks when an administrative law judge denied their request, upheld by a state administrator. In response, Tesla filed a petition in Outagamie County Circuit Court, challenging the decision and seeking either a reversal or a new hearing. The case highlights the tension between Tesla's innovative business model and traditional dealership structures.

Wisconsin’s existing "factory store" law prohibits vehicle manufacturers from owning or operating dealerships directly, aiming to prevent unfair competition. This regulation forces consumers interested in Tesla models like the Cybertruck or Model Y to travel to neighboring states such as Illinois or Minnesota for purchases. Tesla applied for an exemption to transform its existing showrooms in Madison and Milwaukee into direct-sales dealerships and expressed interest in opening two additional locations in Glendale and Appleton. However, this request was denied in October, leading Tesla to pursue further legal action.

The company argues that no independent dealer can meet its stringent standards and profit under its flat-price, direct-to-consumer sales model. Tesla claims that allowing independent dealerships would undermine its business practices, which emphasize uniform pricing and a middleman-free purchase experience. Additionally, Tesla contends that the state's decision violates its economic liberty rights enshrined in the Wisconsin Constitution. The Wisconsin Automobile & Truck Dealers Association (WATDA) counters that several independent dealerships could operate Tesla franchises profitably through services and used vehicle sales.

Administrative Law Judge Kristin Fredrick initially recommended denying Tesla’s exemption request, a decision upheld by DHA Administrator Brian Hayes. Hayes cited Tesla's circular logic regarding independent dealerships and concluded that the current law does not support Tesla’s arguments. Following this setback, Tesla filed a petition in Outagamie County Circuit Court, arguing six grounds for review, including procedural irregularities and constitutional violations. The case now awaits a decision on WATDA’s motion to change venue to Dane or Milwaukee counties, with a hearing scheduled for March 24 in Appleton.

Tesla's efforts to challenge Wisconsin's "factory store" law underscore the broader debate surrounding automotive retail models. As the company continues its legal pursuit, the outcome will have significant implications for both Tesla's expansion plans and the future of vehicle sales in Wisconsin. The resolution of this case may set a precedent for how states balance consumer convenience with established dealership regulations, potentially influencing similar debates across the country.

In a significant shift for the automotive industry, Vietnam is set to reintroduce registration fees for electric vehicles (EVs) starting in March 2025. This move, which will require EV owners to pay a fee based on the number of seats—50% of what gasoline vehicle owners pay—is expected to impact both pricing and market demand. Analysts predict that while there may be a short-term surge in EV purchases before the new policy takes effect, the overall growth of Vietnam's EV market could slow down or even decline this year. The government had previously introduced incentives, including registration fee exemptions, in 2022, which fueled rapid growth for domestic manufacturers like VinFast, often referred to as "Vietnam's Tesla."

Details of the Policy Change and Its Impact on the Market

In the heart of Southeast Asia, Vietnam’s decision to reinstate registration fees for electric vehicles marks a pivotal moment for the country’s automotive sector. Beginning in March 2025, EV owners will no longer enjoy the exemption they have benefited from since 2022. Instead, they will now be required to pay a registration fee that varies by location and ranges between 5% to 6% of the vehicle's listed price. For example, the budget-friendly Wuling Hongguang MINI EV would incur a registration fee of approximately 9.85 million VND (around $388), while luxury models like the Rolls-Royce Spectre would face a fee of about 89.5 million VND ($35,000).

The Vietnamese government's decision to phase out these incentives comes after a period of rapid growth in the EV market, driven largely by the success of VinFast, the country’s only domestic EV manufacturer. In just a few years, VinFast has become a symbol of Vietnam’s ambition to compete in the global EV race. However, with the expiration of the three-year decree at the end of February, industry experts are concerned about the potential slowdown in market expansion. Some predict a short-term rush to purchase EVs before the new fees take effect, but long-term sales could suffer as consumers reassess their willingness to pay higher upfront costs.

Beyond local manufacturers, Chinese automakers have also made significant inroads into Vietnam’s market. Brands such as Wuling, BYD, and Chery have gained considerable attention with their competitive pricing, modern designs, and advanced technology. However, concerns remain about the depreciation rates of Chinese-made EVs in the used car market, raising questions about the durability and quality of these vehicles over time.

The World Bank projects that despite these challenges, Vietnam’s EV sales could still reach 160,000 units in 2025, with nearly 1.3 million units forecasted by 2035. Nevertheless, many companies argue that further incentives, such as tax reductions and lower interest rates, are necessary to sustain this growth trajectory.

From a broader perspective, the reintroduction of registration fees highlights the ongoing debate between fostering innovation and maintaining fiscal discipline. While the government seeks to balance its budget, it must also consider the long-term benefits of supporting a cleaner, more sustainable transportation system. The coming months will reveal how this policy shift impacts consumer behavior and the overall direction of Vietnam’s EV market.