Rivian Sues Ohio DMV Over Ban on Direct Car Sales, Alleges Unfair Advantage for Tesla

Rivian is suing Ohio's DMV over a ban on direct car sales, calling it "irrational in the extreme" and arguing it harms competition and limits consumer choice. The company notes that Tesla is permitted to sell vehicles directly to customers in Ohio, creating an unfair standard for other electric vehicle companies. Rivian claims the ban is "pure economic protectionism" that prioritizes dealers' profits over consumers.

Electric vehicle (EV) manufacturer Rivian has filed a federal lawsuit against Ohio's Department of Motor Vehicles (DMV), alleging that the state's partial ban on direct car sales is "irrational in the extreme" and discriminatory. The company contends that the ban unfairly limits consumer choice and harms competition, particularly since Tesla is exempt from the rule [1][2][3].

Ohio's current law requires the state DMV not to provide a dealership license to manufacturers or their affiliates for direct car sales. However, Tesla was granted an exception in 2014, allowing it to sell vehicles directly to consumers through three brick-and-mortar stores in the state [1][2]. Rivian, which has been unable to sell vehicles directly in Ohio, argues that this exemption creates an unfair playing field for other EV manufacturers.

Rivian's lawsuit contends that the ban is "pure economic protectionism" that prioritizes the profits of traditional dealerships over consumers. The company asserts that Ohio's prohibition on direct sales is unconstitutional and irrational, as it allows Rivian to perform repairs and deliver cars purchased out-of-state but prevents it from completing the sale of Rivian vehicles within the state [1][2][3].

The lawsuit highlights that Rivian's ability to compete in the Ohio market is significantly hindered by the ban. The company argues that allowing direct sales would boost local jobs and innovation, as well as facilitate the adoption of its R1T pickup and R1S SUV models [3].

Industry analysts view Rivian's action as part of a broader push by EV manufacturers to dismantle dealer monopolies. Tesla's early victories in challenging direct-sales bans have paved the way for other companies like Rivian to amplify the fight. Rivian's lawsuit builds on the momentum from a 2023 ruling in Illinois that favored Rivian against dealer associations [3].

The outcome of Rivian's lawsuit could have significant implications for other states with similar prohibitions, including Michigan and Texas. Legal experts predict a protracted battle, with Ohio likely to defend the ban on consumer protection grounds. However, Rivian's aggressive stance reflects confidence in evolving public sentiment toward direct sales models [3].

References:
[1] https://www.engadget.com/transportation/evs/rivian-sues-ohio-dmv-over-partial-ban-on-direct-car-sales-191259497.html
[2] https://www.theverge.com/news/718186/rivian-ohio-lawsuit-direct-sales-ban
[3] https://www.webpronews.com/rivian-sues-ohio-bmv-over-discriminatory-direct-sales-ban-cites-tesla-exemption/