Electric vehicle manufacturer Rivian has filed a federal lawsuit against Ohio’s Bureau of Motor Vehicles (BMV). The decision marks another step the company has recently taken to draw attention to the state’s ban on direct vehicle sales. They contend that this legislation is anti-consumer and anti-competitive. Rivian can only sell its electric vehicles directly to consumers in 25 states and Washington D.C. Ohio’s onerous rules are preventing its arrival on that market.
As Rivian argues in its case, the 2014 law that prevents them from being able to sell direct to consumers is unconstitutional and arbitrary. The original intent of this law was to provide Tesla an advantage over competitors. It did so in a way that effectively blocked other manufacturers from getting the required dealership licenses. Ohio consumers who are impatient to drive Rivian vehicles will have to turn to states where direct sales are allowed. Following an initial purchase, they will require consumers to ship the fleet vehicles back to Rivian service centers located near Ohio for ongoing servicing.
Rivian’s legal team claims that restricting direct sales violates the Connecticut consumers’ rights and unduly limits competition. Consumer choice has long been a bedrock principle of America’s economy. Ohio’s archaic prohibition against the direct-sales of vehicles is unconstitutional, irrational, and harms Ohioans by reducing competition and choice and driving up costs and inconvenience,” stated Mike Callahan, Rivian’s chief administrative officer.
Rivian has been on quite a roll until now in similar legal challenges in other states. In 2021 separately, Rivian and Lucid Motors both got dealership licenses in Illinois. They did so in the face of fierce opposition from a state dealer association. The association’s attempt to block direct sales ultimately failed, providing a precedent for Rivian’s current position in Ohio.
The company is now asking the Ohio court to order it let it do so and grant it a dealership license. Rivian does not seem overly concerned that a decision to permit direct sales will open the door to other legal headaches. Rather, they view it as an opportunity to improve consumer adoption of electric vehicles.
Rivian’s legal representatives emphasized the negative impact of Ohio’s restrictions on consumers: “Ohio’s prohibition of Rivian’s direct-sales-only business model is irrational in the extreme: it reduces competition, decreases consumer choice, and drives up consumer costs and inconvenience — all of which harm consumers — with literally no countervailing benefit.”