Rivian Sues for Direct EV Sales in Ohio

Rivian has filed a lawsuit in Ohio aimed at allowing direct sales of its electric vehicles to consumers in the state, representing the latest chapter in the ongoing battle between new American automakers and the powerful dealership lobby.

On Monday, the company took legal action against the registrar of Ohio’s Bureau of Motor Vehicles (BMV) in federal court, arguing that the state’s restrictions harm consumers by obstructing direct sales. Currently, Rivian can sell EVs directly in 25 states and Washington D.C. The Ohio BMV has not yet released a statement regarding the situation.

“Ohio’s prohibition on Rivian’s direct-sales-only business model is exceedingly irrational: it suppresses competition, narrows consumer choices, and increases costs and inconvenience for consumers—without offering any offsetting advantage,” the company’s lawyers remarked in the complaint.

Rivian is seeking court permission to apply for a dealership license to enable direct vehicle sales. At present, Ohio customers are required to buy Rivian vehicles from other states where direct sales are allowed, followed by shipping the cars to Rivian service centers in Ohio.

The company argues that permitting direct sales is not groundbreaking, noting that Tesla has held a license to sell in Ohio since 2013 and can sell directly to consumers.

The obstacle for Rivian originates from a 2014 law enacted by the state legislature. Rivian insists this law followed extensive lobbying by the Ohio Automobile Dealers Association (OADA) and effectively provided an exemption for Tesla, while restricting other manufacturers from acquiring essential dealership licenses. (OADA has not yet commented on the requests for statements.)

“Consumer choice is a fundamental aspect of the American economy. Ohio’s outdated ban on direct vehicle sales is unconstitutional, illogical, and harmful to Ohio residents by reducing competition and choice, along with raising costs and inconvenience,” asserted Mike Callahan, Rivian’s chief administrative officer.

Rivian has previously overcome legal hurdles concerning direct sales. In 2021, both Rivian and Lucid Motors received dealership licenses for selling EVs in Illinois. The state’s dealer association tried to block Rivian and Lucid from selling directly, but failed in its efforts.

Simultaneously, Lucid Motors launched its own lawsuit in Texas in 2022, challenging the state’s ban on direct sales. Despite the court ruling against Lucid earlier this year, the company has since filed an appeal, according to federal court documents.