Rivian Sues Ohio Over Direct Sales Ban, Citing Unfair Advantage for Tesla
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Electric vehicle manufacturer Rivian has filed a lawsuit against Ohio, challenging a state law that prohibits direct-to-consumer sales for most automakers.
The lawsuit alleges the 2014 Ohio law violates the Fourteenth Amendment's equal protection clause by uniquely exempting Tesla from the direct sales ban.
Rivian, which operates its own dealerships in 16 other states, seeks to establish direct sales operations in Ohio to enhance market competition and consumer choice.
This legal challenge highlights ongoing tensions between innovative EV sales models and traditional automotive dealership protection laws across the United States.
Electric vehicle manufacturer Rivian has initiated legal action against the state of Ohio, contending that a state law enacted in 2014 unfairly grants Tesla an exclusive right to direct-to-consumer vehicle sales while prohibiting other manufacturers from adopting the same model. Filed on August 4 in the U.S. District Court in Columbus, the lawsuit asserts that Ohio Revised Code Section 4517.02(A) violates the Fourteenth Amendment's Equal Protection Clause, creating an uneven competitive landscape within the state's burgeoning electric vehicle market.
The contentious 2014 legislation, which allows the Registrar of Motor Vehicles to deny a dealer license to a manufacturer or its affiliates, was reportedly lobbied for by the Ohio Automobile Dealerships Association (OADA). Rivian's complaint suggests this move was designed "to cut-off future competition" from direct-sales-only models, effectively grandfathering in Tesla, which already operated two dealerships in Ohio at the time and has since opened a third. This legislative framework permits Rivian to conduct various operations in Ohio, including vehicle servicing, rentals, and facilitating financing for out-of-state purchases, but explicitly bars direct sales within the state.
Like Tesla, Rivian employs a direct-sales model, operating its own dealerships in 16 other U.S. states. The company argues that allowing it to sell directly to Ohio consumers would foster increased competition and expand consumer choice, aligning with the existing precedent set by Tesla. Rivian's legal filing explicitly states its intent to "take every step necessary to obtain an an Ohio dealership license and sell its vehicles in Ohio directly to consumers" should the court grant relief.
This lawsuit unfolds amidst significant growth in the EV sector and Rivian's own expansion efforts. In January, the company secured a substantial $6.5 billion loan from the U.S. Department of Energy, under President Biden's administration, to support the construction of a second manufacturing plant in Georgia, complementing its existing facility in Illinois. The outcome of this legal challenge in Ohio could set a precedent for direct sales regulations in other states, impacting how new and established EV manufacturers navigate complex state-specific distribution laws. No court date has yet been scheduled for the case.