Rivian sues to sell its EVs directly in Ohio

Rivian has initiated a lawsuit in Ohio, aiming to secure the right to sell its electric vehicles directly to consumers. This legal move marks another chapter in the ongoing battle between emerging American automakers and the entrenched dealership lobby. On Monday, Rivian filed its complaint in federal court against the registrar of Ohio’s Bureau of Motor Vehicles (BMV), contending that the state's restrictions on direct sales are detrimental to consumers. Currently, Rivian is able to sell its EVs directly in 25 states and Washington D.C., but Ohio residents are forced to purchase vehicles from out-of-state locations where direct sales are permitted, with the cars then transported to Rivian service centers in Ohio. The lawsuit argues that Ohio's prohibition on Rivian's business model is not only irrational but also detrimental to competition and consumer choice, ultimately leading to increased costs and inconvenience for buyers. Rivian’s legal team emphasized that the lack of direct sales presents no tangible benefits to consumers. Rivian is requesting the court to permit the company to apply for a dealership license, which would allow it to sell vehicles directly in Ohio. The legal precedent for direct sales exists, as Tesla has been operating under a sales license in the state since 2013. However, Rivian points to a 2014 law, attributed to heavy lobbying by the Ohio Automobile Dealers Association (OADA), which effectively blocked new manufacturers from obtaining dealership licenses while granting Tesla an exception. Rivian's Chief Administrative Officer, Mike Callahan, expressed that consumer choice is fundamental to the American economy. He criticized Ohio's outdated laws as unconstitutional and harmful to residents by stifling competition and inflating costs. Rivian has previously achieved victories in its fight for direct sales. In 2021, it, along with Lucid Motors, was granted dealership licenses in Illinois despite opposition from the state's dealer association. In contrast, Lucid Motors faced a setback in Texas earlier this year when a court ruled against its challenge to a direct-sales ban, though the company is currently appealing that decision.