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West Virginia Proposes Law That Would Hurt Consumers, Help Dealers

February 23, 2022

A bipartisan bill, HB 4560, was introduced in West Virginia by nine lawmakers on February 7th. The language in the proposed law is a wish list for car dealers.

Car dealerships are terrified of losing their grip on the cash cow that is vehicle maintenance, repairs, service, and recall work. Over-the-air (OTA) updates change the way that vehicles are modified, and that’s a concern for car dealers. A simple Wi-Fi connection is all that Tesla (and a growing list of automakers) needs to send you the latest updates to infotainment, battery health, or even performance. Automakers have even fixed several recalls using remotely-administered OTA updates.

Maintenance, recall work, and service and repairs make up a substantial portion of dealership revenue, and they’re not willing to let go without a fight. CleanTechnica reports that the Alliance for Automotive Innovation (AAI), which represents automakers, sent a letter to the West Virginia Legislature stating their concerns about the anti-consumer nature of House Bill 4560. The bill alludes to just how messy things can get as automakers wield more control over the vehicle ownership experience.

HB 4560 Limits OTA Updates in West Virginia

The bipartisan bill was introduced on February 7th by nine lawmakers in the West Virginia House of Delegates. It’s a lengthy bill, and reads like a wish list for dealerships. The overall language in HB 4560 seeks to specify the automaker-dealer relationship in the state.

The language concerning over-the-air updates is in the ‘prohibited practices’ section, specifically §17A-6A-10-2-r:

“A manufacturer or distributor may not do any of the following:

Except for experimental low-volume not-for-retail sale vehicles, cause warranty and recall repair work to be performed by any entity other than a new motor vehicle dealer, including post-sale software and hardware upgrades or changes to vehicle function and features, and accessories for new motor vehicles sold by a licensed new motor vehicle dealer. Provided however, this language shall not include any post-sale software upgrades to the motor vehicle’s navigation or entertainment system.”

Clearly, the bill’s sponsors are doing their best to preserve the ritual of dreaded service center visits even if innovation offers a more convenient alternative.

You can read the entire 44-page bill here.

Follow the Money: Dealership Interests Tied to the Bill’s Sponsor

A quick look at primary sponsor Delegate Vernon Adrian Criss’ track record reveals financial ties to West Virginia dealerships. Delegate Criss’ most recent campaign donor information on Ballotpedia shows that the West Virginia Automobile & Truck Dealers Association was among the top five donors to his 2016 campaign. His top donor in the same election cycle was none other than Bill Cole, former lawmaker and dealership franchise owner.

HB 4560 sponsor
The bill’s primary sponsor has received contributions from dealer interests.

It’s certainly no surprise that lawmakers are in the pockets of dealer interests. Still, it’s a sad reminder that many lawmakers are vehemently opposed to ‘government overreach’, unless it serves their personal interests.

How Do West Virginia’s Car Owners Feel About HB 4560 and OTA Updates?

It just so happens that I’m a West Virginia resident. I love calling The Mountain State home. Go Mountaineers! West Virginia often gets a bad rap in the national media. In my opinion, this state has so many redeeming qualities that make it a great, beautiful place to live. 

Personally, I feel that the language regarding OTA updates in HB 4560 would be a big step in the wrong direction if West Virginia aims to continue diversifying its economy. West Virginia is now the new home to GreenPower, an electric school bus manufacturer bringing hundreds of jobs. Toyota recently announced the expansion of the West Virginia plant that builds hybrid powertrain components. Renewable energy is finally starting to take off in the state after centuries of powering the nation with its rich natural resources. 

West Virginia is full of hope, and diverse opinions. I decided to reach out to members of the West Virginia Electric Auto Association (WVEAA) to see how electric vehicle owners feel about the proposed language in HB 4560. 

Member Terry Cox noted the parallels between today’s evolving vehicle sales models and transitions of the past.

“I understand the dealers are feeling threatened by direct sales from the manufacturer, which cuts them out of the sales process and provides little to no maintenance for their repair shops.  But it’s just like Amazon and Walmart threatening the small, local businesses.  Auto dealers will need to adapt to survive.”

Thornton Cooper thinks the uproar could be a misguided interpretation of a lackluster bill. He doesn’t get what all the fuss is about. 

“The bill would apply to upgrades of hardware and software on motor vehicles sold at dealerships in West Virginia. I figure that the intent is to have manufacturers, rather than dealers, bear more of the costs of the upgrades.”

Cooper also emphasized that the bill’s text must be interpreted through the lense of the Commerce Clause of the United States Constitution.

WVEAA Vice President Marty Weirick sees the broader implications of HB 4560.

“The fact that a bill to ban OTA was introduced and then changed should make us realize just how vulnerable EV drivers are to political skullduggery.”

Revisions Likely, But Tesla Owners Are On Alert

The bill is still in the very early phases of the legislative process. A hearing was held for the bill on February 22, and a revised draft is due for release. It’s possible that the concerns voiced by the Alliance for Automotive Innovation affect the final language of the bill. Toyota has a major parts assembly plant outside of Charleston, WV, so automakers have some sway in The Mountain State. 

What Does It Mean For Consumers?

EV over-the-air updates
2021 Ford Mustang Mach-E

Over-the-air updates bring much-needed convenience to vehicle ownership. Downloading an update can remedy recall concerns and improve vehicle safety within hours, without ever needing to schedule an appointment. Dealers know this, but they don’t want to lose your business. 

Tesla pioneered OTA updates, and their success brought legacy automakers to see the value of remote software updates. Now, the likes of Ford, General Motors, VW Group and Stellantis are all rolling out OTA update capability. Although House Bill 4560 is likely to undergo revisions, the simple fact that this language was introduced at all is a troubling sign of what could come to legislatures around the nation. If lawmakers succeed at restricting the use of OTA updates to please powerful dealers, new car ownership will take a big step backwards after years of promising, exciting innovation. 

Learn more about the potential of over-the-air updates in our CarEdge guide.

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