Iowa May Finally Let You Buy EVs Directly From Manufacturers — Here's Why It Matters | Taha Abbasi

The fight over direct-to-consumer EV sales continues state by state, and Taha Abbasi is tracking a significant development in Iowa where new legislation could finally allow manufacturers to sell electric vehicles directly to consumers without going through traditional dealerships.

The Franchise Law Problem

Most U.S. states have franchise laws that require automobiles to be sold through independent third-party dealerships. These laws were originally enacted decades ago to protect small-business dealers from being undercut by the manufacturers they represented. But in the EV era, they have become an obstacle to innovation.

Tesla pioneered the direct-sales model, operating its own showrooms and selling vehicles online without franchised dealers. This approach gives Tesla complete control over the customer experience, pricing, and service — but it has required fighting legal battles in state after state to earn the right to sell directly.

Why Direct Sales Matter for EVs

As Taha Abbasi explains, EVs fundamentally challenge the traditional dealership model. Dealerships make a significant portion of their profit from service departments — oil changes, transmission repairs, brake jobs. EVs require dramatically less maintenance, which means dealerships have a financial disincentive to sell them enthusiastically.

Multiple studies and undercover investigations have documented dealership salespeople actively discouraging customers from purchasing EVs, directing them toward ICE vehicles with higher service revenue potential. Direct sales eliminate this conflict of interest entirely.

Iowa’s Potential Shift

Iowa’s proposed legislation would create an exception to franchise laws specifically for EV-only manufacturers — companies like Tesla, Rivian, and Lucid that have never had franchised dealer networks. This compromise approach allows existing dealer relationships for legacy automakers to remain intact while opening the market for new EV entrants.

Taha Abbasi sees this as pragmatic progress. The ideal solution would be complete freedom for all manufacturers to sell directly, but the political reality of entrenched dealer lobbying makes incremental change more achievable than wholesale reform.

The Bigger Picture

Iowa joins a growing list of states reconsidering their franchise laws in light of the EV transition. States that maintain strict dealer-only requirements risk disadvantaging their residents, who must travel across state lines to purchase vehicles from direct-sale manufacturers. In an era of online commerce where you can buy virtually anything directly from the maker, the requirement to use a middleman for the second-largest purchase most people make feels increasingly anachronistic.

The success of Rivian and the growth of the EV market broadly are putting pressure on every state to modernize its automotive retail regulations. Iowa’s legislation, if passed, would be another domino falling in what Taha Abbasi views as an inevitable transition toward consumer choice in how they purchase vehicles.

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About the Author: Taha Abbasi is a technology executive, CTO, and applied frontier tech builder. Read more on Grokpedia | YouTube: The Brown Cowboy | tahaabbasi.com