HB938 makes a broad set of changes to Hawaii’s Motor Vehicle Industry Licensing Act, primarily affecting the relationship between franchised new motor vehicle dealers and manufacturers or distributors. The bill creates a new section governing “remote electronic transmission compensation,” allowing manufacturers and distributors to sell or activate vehicle features, accessories, add-ons, and upgrades remotely after a vehicle is sold, while requiring them to share a minimum 20 percent of gross revenue with the franchised dealer if the vehicle was sold or leased new by that dealer within the prior five years. It also requires quarterly revenue statements and written disclosure to dealers about remotely activated features and associated consumer charges.
The bill expands and clarifies several definitions and regulatory standards in chapter 437, including adding “common entity” and extending certain franchise protections and obligations to those entities. It revises what counts as a “sale” for purposes of the act, broadening the scope of activities that may be treated as direct sales or sales-related conduct. It also updates grounds for licensing discipline, franchise transfer rules, succession rights, and dealer protections against manufacturer conduct such as coercive agreements, unfair allocation, discriminatory pricing, and direct-to-consumer sales outside the franchise system. In addition, it strengthens and modernizes warranty reimbursement rules for parts and labor, chargeback procedures, and recall compensation.
A major practical effect of the bill is to increase dealer leverage in disputes over warranty reimbursement, facility requirements, and manufacturer-imposed costs, while also imposing new obligations on manufacturers and distributors to compensate dealers and provide disclosures. It limits manufacturers’ ability to require dealers to buy electric vehicle charging stations or diagnostic tools at the dealer’s expense unless the dealer has opted into EV sales/service, and it places conditions on facility upgrades, site-control demands, and transfer approvals. The bill would therefore alter how manufacturers, distributors, and their affiliated entities interact with Hawaii franchised dealers, especially in the areas of EV infrastructure, over-the-air feature monetization, and post-sale digital vehicle services.
Because there were no committee transcripts or recorded votes provided, the overall sentiment cannot be measured from debate or roll call history. Based on the bill text alone, the measure appears designed to protect dealers from manufacturer overreach while also recognizing manufacturer participation in remote digital feature sales. The tone of the bill is regulatory and protective rather than punitive, with detailed procedural safeguards and compensation rules intended to reduce disputes and clarify rights and obligations.
The main points of contention likely center on the bill’s treatment of direct manufacturer sales, remote feature monetization, and the expanded obligations imposed on manufacturers and distributors. Dealers may support the revenue-sharing requirement and the restrictions on forced facility or EV infrastructure investments, while manufacturers may object to the 20 percent revenue-sharing mandate, the limits on chargebacks, and the restrictions on direct sales and control over dealer operations. The inclusion of “common entities” also suggests an effort to reach affiliated or structurally related companies, which could be controversial for manufacturers that use separate corporate entities for digital services, financing, or retail operations.
HB938 would amend multiple sections of chapter 437, Hawaii Revised Statutes, and add a new section governing remote electronic transmission compensation. It would expand the Motor Vehicle Industry Licensing Act to cover common entities affiliated with manufacturers or distributors, revise franchise and sale definitions, add or modify licensing discipline grounds, and change dealer-protection rules for franchise transfers, succession, warranty reimbursement, chargebacks, recall compensation, facility requirements, and EV charging equipment. The bill would directly affect manufacturers, distributors, franchised new motor vehicle dealers, and affiliated entities operating in Hawaii.
No committee discussion or vote history was provided, so there is no recorded public sentiment to summarize from legislative debate. From the bill text, the measure appears generally pro-dealer and consumer-disclosure oriented, while still allowing manufacturers to participate in remote feature sales if they compensate dealers. The overall framing suggests an attempt to balance emerging vehicle technology business models with traditional franchise protections.
The most likely areas of contention are the new 20 percent dealer revenue share for remotely activated features, the expanded definition of manufacturer-related “common entities,” and the bill’s restrictions on manufacturer control over dealer facilities, EV charging equipment, and direct-to-consumer sales. Manufacturers and distributors may view these provisions as limiting their ability to manage brand standards and digital revenue streams, while dealers are likely to support them as protections against coercive practices and uncompensated post-sale monetization. Warranty reimbursement and chargeback changes may also be disputed because they make it harder for manufacturers to deny or reduce dealer claims.