Rivian’s Legal Battle Uncovers the Most Ridiculous Obstacle in the Automotive Industry | Carscoops

      The electric vehicle manufacturer contends that the state's prohibition on direct sales is illogical.

      Rivian has filed a lawsuit against Ohio to challenge a ban that prevents it from selling cars directly in the state.

      While the law permits Rivian to provide service, rent, and deliver cars in Ohio, it does not allow for sales to take place there.

      A favorable outcome could establish a precedent, as Rivian aligns with Tesla, Lucid, and Scout in contesting direct-sales restrictions.

      In the U.S., car dealerships have consistently opposed the growth of direct-to-consumer auto sales, and this resistance continues in Ohio. Rivian is currently barred from selling its vehicles directly to consumers in the state. The newly filed lawsuit aims to potentially alter that, which could lead to lifting the ban and establishing a wider legal framework.

      Rivian is permitted to sell vehicles to Ohio residents, but these transactions cannot occur within the state boundaries. Prospective buyers must acquire their vehicles from a Rivian location outside of Ohio. Ironically, the only activity Rivian is prohibited from doing is completing sales within the state.

      The lawsuit, directed against the Ohio Bureau of Motor Vehicles, describes the existing arrangement as illogical. It states, “Ohio permits manufacturers like Rivian to conduct warranty services and repairs on vehicles in the state, to rent cars to consumers, and even to sell new vehicles to Ohio residents through out-of-state dealerships, which can be delivered to Rivian service centers within the state's borders.”

      “However, when it comes to finalizing a sale within Ohio, that remains prohibited. This creates an undue burden on both consumers and Rivian without valid justification," the lawsuit continues.

      This situation is not unexpected, as the National Automobile Dealers Association (NADA) consistently lobbies to prevent companies like Rivian, Tesla, and Lucid from selling directly to consumers.

      Rivian asserts that the matter is about consumer choice and market competition.

      “Rivian holds that consumers should have the freedom to choose the vehicles they buy,” stated Mike Callahan, chief administrative officer. “Consumer choice is a fundamental principle of America’s economy. Ohio’s outdated ban on direct vehicle sales is unconstitutional, unreasonable, and negatively impacts Ohio residents by limiting competition and choice while increasing costs and inconvenience.”

      Should Callahan and Rivian succeed, it could further influence legal standards.

      In 2021, the automaker triumphed in a legal battle in Illinois and upheld that win despite opposition from the state's dealer association, according to TechCrunch. Lucid, Tesla, and Scout Motors are also striving to eliminate direct sales bans in various states across the U.S. Notably, Tesla has already reached an agreement with the Ohio BMV, allowing it to conduct sales within the state. It’s possible Rivian might pursue a similar arrangement.