So as it turns out those kids sandboxes are actually quite water capable

I don't think that has anything to do with it, more just antiquated laws that havent been updated. They were probably written when electric motors and battery tech was not nearly advanced enough to be reasonably used on the water. The authorities probably thought electric motor usage would be relegated to the smaller craft than required registration. You can be sure this will change, and in places like FL and AK you need registration for any motor powered vessel.

They make you register it to get your money and maintain boat related state owned equipment, as well as fund their water cops.

Lets not forget electric boats are full of - cadmium, lead, nickel, lithium, or a combo. If something goes wrong, say a battery has an internal short due to a hard run aground, charger malfunctions, wiring gets chafed in the wrong spot... they can erupt in flames in no time, creating noxious fumes and for sure polluting. Alot of these boats are packing lead acid batteries, and if they tip over or flood due to negligence, there goes battery acid everywhere

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