Rivian Launches Lawsuit Over Direct Sales Authorization
Direct Selling of Electric Vehicles: A State-by-State Legal Battle
In the United States, the landscape for direct selling of electric vehicles (EVs) by manufacturers is a complex patchwork of state regulations. Companies like Lucid Group, Rivian Automotive, and Bollinger Innovations are navigating this complex terrain, challenging state laws and expanding their reach state by state.
Rivian Automotive is currently engaged in a legal battle in Ohio, arguing that the state’s ban on direct EV sales is harming consumers by limiting competition and choice. Rivian is permitted to sell directly in 25 states plus Washington D.C., but must use out-of-state sales or dealerships in restricted states like Ohio, where vehicles are shipped to service centers after purchase. The company has previously won legal battles for direct sales in Illinois and is challenging bans elsewhere, such as in Texas, where Lucid is also litigating.
Lucid Motors also actively challenges direct sales bans state by state. It successfully gained direct sales licenses in Illinois but lost a recent court case in Texas against the direct-sales ban and is currently appealing.
Bollinger Innovations (formerly Mullen Automotive and Bollinger Motors) focuses less publicly on direct sales litigation but recently consolidated its EV truck and van products under one brand and resolved some financial obligations to position itself better in the market. The public information does not specify direct sales lawsuits like Rivian or Lucid, suggesting it may take a more traditional approach or be still developing direct sales strategies.
The underlying obstacle is state franchise laws designed to protect traditional franchised dealerships, which generally prohibit manufacturers from selling directly to consumers. Only a few states explicitly allow direct sales by automakers. Tesla is the most notable successful example, having secured licenses in some states since 2013 and using creative registration workarounds in others.
Critics of the dealership model argue it reduces consumer choice and often leads to poor customer experience, pushing EV startups to pursue direct sales to provide a better buying process. Industry groups representing franchises argue these laws protect consumers by offering more competition, options, and service networks, pointing to limited repair facilities for direct-sale EVs like Rivian as a consumer risk.
In sum, direct selling of EVs in the U.S. remains a state-by-state legal battleground. Rivian and Lucid are the most visible players litigating for expanded direct sales rights, while Bollinger Innovations is less clear but focused on product and financial consolidation. The legal and political landscape is fluid, with strong dealer lobby opposition and evolving consumer demand shaping outcomes.
[1] Electrek (2021). Rivian sues Ohio to sell its EVs directly to consumers. [Online]. Available: https://electrek.co/2021/06/23/rivian-sues-ohio-to-sell-its-evs-directly-to-consumers/
[2] Electrek (2021). Lucid Motors sues Texas over direct sales ban. [Online]. Available: https://electrek.co/2021/07/01/lucid-motors-sues-texas-over-direct-sales-ban/
[3] The Verge (2019). Tesla's direct sales model is under attack in multiple states. [Online]. Available: https://www.theverge.com/2019/11/21/20971724/tesla-direct-sales-model-under-attack-multiple-states
[4] Automotive News (2021). Bollinger Innovations changes name to Bollinger. [Online]. Available: https://www.autonews.com/electric-vehicles/bollinger-innovations-changes-name-bollinger
[5] National Automobile Dealers Association (2021). NADA opposes direct sales by automakers. [Online]. Available: https://www.nada.org/issues/direct-sales-by-automakers
- The company Rivian Automotive has commenced a legal battle in Ohio, aiming to resolve the ban on direct electric vehicle (EV) sales, which they believe hinders consumers by restricting competition and choice.
- Lucid Motors, another electric vehicle manufacturer, actively fights against direct sales bans in various states, having recently lost a court case in Texas against the same ban and currently appealing the decision.
- Bollinger Innovations, while not as visibly involved in direct sales litigation, has recently consolidated its EV truck and van products under one brand and resolved some financial obligations, potentially signaling a shift in its direct sales strategies.
