Rivian sues to sell its EVs directly in Ohio

Rivian has filed a lawsuit in Ohio to be able sell its electric vehicles directly to consumers in the state — the latest swing in a perpetual fight between up-and-coming American automakers and the entrenched and powerful dealership lobby.

The company sued the registrar of Ohio’s Bureau of Motor Vehicles (BMV) on Monday in federal court, claiming the state is harming consumers by blocking direct sales. Rivian is currently able to sell EVs directly to consumers in 25 states and in Washington D.C. Ohio’s BMV did not immediately respond to a request for comment.

“Ohio’s prohibition of Rivian’s direct-sales-only business model is irrational in the extreme: it reduces competition, decreases consumer choice, and drives up consumer costs and inconvenience — all of which harm consumers — with literally no countervailing benefit,” lawyers for the company wrote in the complaint.

Rivian is asking the court to allow the company to apply for a dealership license so it can sell vehicles directly. Ohio customers have to buy from Rivian vehicles from locations in other states where direct sales are allowed. The cars are then shipped to Rivian service centers within Ohio.

Allowing Rivian to sell directly would not be treading new legal ground, the company argues in its complaint. Tesla has had a license to sell in Ohio since 2013 and can sell directly to consumers.

What’s stopping Rivian is a 2014 law passed by the state’s legislature. That law, which Rivian says came after an intense lobbying effort by the Ohio Automobile Dealers Association (OADA), effectively gave Tesla a carve-out and blocked any future manufacturers from acquiring the necessary dealership licenses. (OADA did not immediately return a request for comment.)

“Consumer choice is a bedrock principle of America’s economy. Ohio’s archaic prohibition against the direct-sales of vehicles is unconstitutional, irrational, and harms Ohioans by reducing competition and choice and driving up costs and inconvenience,” Mike Callahan, Rivian’s chief administrative officer, said in a statement.

Rivian has won legal fights over direct sales before. In 2021, Rivian and Lucid Motors were granted dealership licenses to sell EVs in the state of Illinois. That state’s dealer association sued to try to block Rivian and Lucid from selling directly, but ultimately failed.

Lucid Motors, meanwhile, filed a lawsuit of its own in Texas in 2022 in a challenge to that state’s direct-sales ban. The court ruled against Lucid earlier this year, but the company has appealed, federal court records show.