finance
EV Makers Say State Dealership Laws Complicate Direct Sales
Rivian, Lucid Motors and Scout Motors told Business Insider that decades-old state franchise laws restrict their ability to sell vehicles directly to consumers. The laws can limit test drives, pricing discussions and vehicle titling in some states. Dealer associations said the rules protect consumers and allow competition that lowers prices.
May 11, 4:41 AM·3m read1 source
Audio version
Tap play to generate a narrated version.
Developing·Limited corroboration so far. This page will refresh as more sources emerge.
Electric vehicle makers Rivian, Lucid Motors and Scout Motors are navigating a state-by-state patchwork of dealership-franchise laws that limit direct sales to consumers. The laws, written decades ago to govern relationships between traditional automakers and their franchised dealers, restrict where and how newer EV companies can sell vehicles.
As EV sales slow, the manufacturers say making purchases easier has become more important. The companies told Business Insider that the restrictions can create a fragmented customer experience. In some states, prospective buyers may view a vehicle or receive service but cannot test-drive it, discuss pricing or complete a purchase at the same location.
The manufacturers said direct sales allow them to control pricing, educate first-time EV buyers and avoid relying on third-party dealers unfamiliar with the technology. A spokeswoman for the National Automobile Dealers Association said the franchise laws protect both consumers and dealers.
"Franchise laws protect consumers as well as dealers — that's why they've been part of the fabric of America for many years," she told Business Insider. The company filed a lawsuit last year against the Ohio Bureau of Motor Vehicles challenging limits on direct-to-consumer sales.
Rivian cannot obtain a dealer license in the state but can operate service facilities to fulfill warranty obligations. At those service centers, staff can answer basic questions about the vehicles but cannot discuss pricing, financing, purchasing or offer test drives.
"If you're an Ohio resident and want to drive one of our cars, we cannot offer that to you," Whiteman said. Ohio customers must complete purchases online, and in some cases Rivian processes the transaction in Illinois where it holds a license. Customers may need to pay for a temporary Illinois tag and complete power-of-attorney forms before the company submits paperwork to the Ohio DMV.
