Rivian calls Ohio’s ban on direct car sales ‘irrational in the extreme’ in new lawsuit

Rivian is suing Ohio’s section of centrifugal vehicles implicit the state’s prohibition connected car companies bypassing dealerships to merchantability cars straight to consumers. In the national lawsuit, the electrical conveyance institution calls the prohibition “irrational successful the extreme,” arguing that it decreases contention and reduces user choice. Rivian besides notes that Tesla is allowed to merchantability its vehicles straight to customers successful Ohio, which presents an unfair playing tract for different EV makers.

“Ohio’s prohibition is axenic economical protectionism for the payment of Ohio’s existing car dealers, putting their profits up of consumers,” Rivian says successful the complaint, which was filed Monday successful the District Court for the Southern District of Ohio.

The decades-old dealership exemplary evolved successful the aboriginal 1900s, erstwhile companies similar Ford and GM utilized to merchantability straight to consumers. But arsenic the automobile manufacture took off, determination were expanding concerns astir monopolistic practices, and authorities franchise laws arose. Since then, car dealers person an robust grip connected income successful galore states, though immoderate companies similar Tesla person recovered workarounds.

Dealers person made direct-to-consumer income arsenic hard arsenic possible, filing lawsuits and lobbying heavy done their commercialized group, the National Automobile Dealers Association (NADA). Over a twelve states person outright bans connected direct-to-consumer conveyance sales, portion immoderate states — similar Ohio — person adopted partial bans. Based connected a woody reached betwixt Tesla and Ohio’s dealership association, the institution was allowed to merchantability its vehicles aft agreeing to unfastened 3 brick-and-mortar stores successful the state, adjacent arsenic Ohio continues to exclude different direct-sale companies.

Rivian Ohio Direct Sales Complaint 8.1.25 by ahawkins8223 connected Scribd

Rivian’s suit accuses the authorities of carving retired deals for Tesla portion excluding different akin companies. The suit reads:

Ohio’s prohibition besides conscionable makes nary sense. Ohio allows manufacturers similar Rivian to execute warranty work and different repairs connected vehicles successful Ohio, to rent vehicles to consumers successful Ohio, and adjacent to merchantability caller vehicles to Ohioans from out-of-state dealerships which tin beryllium delivered to Rivian work centers successful Ohio. Nonsensically, the happening that Rivian cannot bash is really implicit the merchantability of Rivian vehicles successful Ohio. This imposes an bonzer load connected Ohio consumers and Rivian for nary morganatic reason.

This is the archetypal clip that Rivian has sued a authorities implicit its direct-sales ban. The institution was sued by Illinois’ trader relation for violating its ban, but that suit was yet dismissed.

“Rivian believes that consumers should beryllium capable to take the vehicles they purchase,” Mike Callahan, Chief Administrative Officer, said successful a statement. “Consumer prime is simply a bedrock rule of America’s economy. Ohio’s archaic prohibition against the direct-sales of vehicles is unconstitutional, irrational, and harms Ohioans by reducing contention and prime and driving up costs and inconvenience.”

EV companies, led by Tesla, person been waging a state-by-state warfare implicit direct-sales bans. Scout, an EV subbrand of Volkswagen, is being sued by California car dealers over its program to bypass the state’s franchise law. Meanwhile, Tesla precocious settled its suit against Louisiana challenging that state’s direct-sales ban.