Rivian sues Ohio DMV over partial ban on direct automotive gross sales

Rivian has filed a lawsuit in opposition to Ohio’s Division of Motor Autos due to the state’s partial ban on direct automotive gross sales, The Verge reports. The corporate says that the ban “reduces competitors, decreases client selection and drives up client prices and inconvenience.” Rivian believes Ohio’s regulation is especially unfair as a result of it comprises a carveout for the corporate’s competitor Tesla.

Ohio currently requires the state DMV to not present a dealership license to “a producer, or a mother or father firm, subsidiary, or affiliated entity of a producer, making use of for a license to promote or lease new or used motor autos at retail.” The regulation retains automotive gross sales within the palms of independently owned automotive dealerships — apart from Tesla. An exception was created for Tesla in 2014, The Columbus Dispatch writes, after the EV maker reached an settlement with the Ohio Dealership Affiliation. Now automobiles within the state are bought by means of conventional automotive dealerships, and three dealerships owned and operated by Tesla.

“Rivian believes that buyers ought to be capable of select the autos they buy,” Rivian’s Chief Administrative Officer Mike Callahan shared in an announcement. “Shopper selection is a bedrock precept of America’s economic system. Ohio’s archaic prohibition in opposition to the direct-sales of autos is unconstitutional, irrational and harms Ohioans by lowering competitors and selection and driving up prices and inconvenience.”

The corporate’s lawsuit does an excellent job of laying out the illogical state of affairs Ohio has created with its ban. Rivian is allowed to carry out repairs on automobiles within the state and ship automobiles bought out-of-state to Ohioans. “Nonsensically, the factor that Rivian can not do is definitely full the sale of Rivian autos in Ohio,” the corporate writes. “This imposes a rare burden on Ohio shoppers and Rivian for no professional purpose.”

As The Verge notes, bans on direct automotive gross sales have traditionally exist to stop giant, established automotive corporations from having a monopoly on the sale of their very own automobiles. Going direct to client is without doubt one of the methods EV makers have differentiated themselves from older manufacturers, one thing corporations like Tesla and Rivian cannot do in states with bans. Rivian might try to strike a deal like Tesla, however submitting a federal lawsuit suggests the corporate might be aiming to win a much bigger, extra lasting change. Rivian has achieved comparable wins up to now. The state of Illinois sued to stop Rivian and Lucid Motors from promoting on to shoppers in 2022, however finally misplaced.