HR7372

The 'Safety is Not For Sale Act' (HR7372) prohibits motor vehicle manufacturers and sellers from bundling optional safety features with non-safety features. It requires these safety features to be offered either as standalone options or as standard equipment. This legislative action directly targets the current automotive sales model where advanced safety features are often packaged with premium convenience or luxury upgrades, forcing consumers to purchase unwanted extras to access critical safety technology. The bill takes effect 180 days after enactment, providing a clear timeline for compliance. This bill does not appropriate new funding. Instead, it redefines how automotive manufacturers can generate revenue from safety features. Companies like General Motors ($GM), Ford ($F), Tesla ($TSLA), Toyota ($TM), Honda ($HMC), and Stellantis ($STLA) currently bundle safety features into higher-trim packages. This bill forces them to unbundle, which will likely lead to lower average transaction prices for vehicles equipped with these safety features, as consumers will no longer be compelled to pay for associated luxury add-ons. The Federal Trade Commission (FTC) is empowered to enforce this act, treating violations as unfair or deceptive acts, and states can also bring civil actions. Historically, regulations impacting automotive sales models have led to shifts in profitability. For example, the 'lemon laws' enacted across various states in the 1980s increased warranty costs for manufacturers and reduced profit margins on defective vehicles. While not directly comparable, this bill similarly imposes a new constraint on sales practices. In 2018, when the National Highway Traffic Safety Administration (NHTSA) proposed stricter safety standards for autonomous vehicles, companies like $GM and $F saw increased R&D costs, impacting their Q3 and Q4 earnings reports that year. This bill, while not a direct safety standard, alters the revenue stream for existing safety features. Specific losers are automotive manufacturers that rely on bundling safety features with high-margin luxury packages. This includes $GM, $F, $TSLA, $TM, $HMC, and $STLA. These companies will experience a direct hit to their average revenue per vehicle as consumers opt for standalone safety features without the associated luxury upgrades. There are no clear winners, as the bill primarily benefits consumers by offering more granular purchasing options at potentially lower costs. The bill has been forwarded by subcommittee, indicating it has cleared an initial hurdle and is progressing through the legislative process. What happens next is the bill moves to the full Committee on Energy and Commerce. If it passes there, it proceeds to a House vote. The effective date is 180 days post-enactment. Companies must prepare to revise their vehicle trim and option packaging strategies within this timeframe. This will necessitate changes to their marketing, sales, and pricing structures.