What’s going on in Illinois?
Rivian and Lucid have won the battle to keep their dealers’ licenses in Illinois. As a recent Carscoops article notes, the Illinois Automobile Dealers Association filed a lawsuit to challenge their licenses issued in 2021.
As of December 19, 2022, Associate Judge David Atkins dismissed the lawsuit, granting the automaker the ability to sell directly to customers. Luckily for Rivian, the Judge stated that selling through franchised dealers has never been a requirement in the state of Illinois. Though selling through dealers is the standard procedure, “that does not mean it ever required such as system,” said Atkins.
Though Rivian and Lucid have effectively won the direct sales dispute in Illinois, there are still many states in which direct sales are banned.
Why ban direct sales at all?
Laws around granting automobile manufacturers dealers licenses vary widely depending on the state. While many states have no restrictions, some limit the number of stores through which vehicles can be sold and others ban it entirely. Alabama, New Mexico and South Carolina go as far as to also ban manufacturers from running service centers. Some state’s rules also prevent certain EV car galleries such as Tesla stores from discussing pricing or test drives. Other states don’t have any clear legislation on the subject.
The advantage of manufacturers selling directly to the customer is that they can sell cars at their listed price. That means fewer dealer fees and no haggling. The laws that prevent direct sales keep manufacturers from treating dealers unfairly or competing with them directly.
Tesla has been fighting the same issue in various states for years. Despite that, it is an ongoing challenge for startup EV manufacturers like Rivian and Lucid. For more information on Rivian and the R1S, check out TFL’s full review here, or the video linked below.