Photo: Rivian
After Tesla fought most of the battles regarding selling directly to the customer, Rivian and Lucid had to endure their challenges. However, a new lawsuit just ended, and the judge cleared the issue. Here’s what happened.
From 2014 until 2016, Tesla had many legal battles to fight. Some continued to this day, while others were pushed to higher courts. Its direct sales model upset many dealership owners, and they wanted the EV maker to go through middlemen as every other legacy automaker out there. Some lawsuits were won, and others were left to be fought on another occasion or are ongoing.
But, in the end, Tesla managed to go on with selling the cars it made to its customers, even if it had to find some clever workarounds in a couple of states. The brand had to make use of tribal land (most recently, in New Mexico) to avoid harsh regulations or invite customers to purchase from other states and have the cars delivered to them at home. In 2019, the company believed so much in its strategy that it moved most of its sales online.
But some of the legal challenges were also transformed into social causes. For example, Tesla requested help from Oklahomans last year. A bill that was going to turn direct sales into a very complicated matter gathered enough support to have the company worried about its operations in the Sooner State.
So, the direct-to-consumer sale model has worked very well for EV makers. Now, other companies that decided to follow the battery-electric route wanted to do the same. Lucid and Rivian, for example, aspired to avoid any problems with dealerships that could cause trouble for their businesses. So they adopted Tesla’s way of doing things, even though Elon Musk warned both companies would be facing bankruptcy at some point. Moreover, even though Ford decided to split its business into two parts, its efforts to adopt the same selling strategy were met with a lot of pushback from its wide network of dealers.
But Lucid and Rivian didn’t have a vast dealership network to worry about. So they followed Tesla’s path and set up great online platforms and remote service operations for their soon-to-be clients. After the first great reviews from early customers, the word got around. Now, the middlemen from Illinois (where Rivian builds trucks and SUVs) had two new EV-making companies to worry about. So they decided to stop them by suing.
The dealership association decided to pursue this costly and complicated path, even though another judge ruled in a different case from 2019 that Tesla was well within the limits of the law when selling directly to buyers.
As Rivian and Lucid expected, the judge said the state of Illinois did the right thing when it awarded the EV makers their dealer licenses. Hence, both companies can continue selling without worrying about what third parties think about their practices.
The Illinois Automobile Dealers Association (IADA) said through an online statement seen by Autonews that it’s disappointed and will think about an appeal. The organization argues that the judge did not want to hear verbal arguments. However, IADA is not yet ready to say if it will go through with this idea.
Finally, a recent survey revealed that new EV buyers like getting their new cars from dealerships. The results said 74% of those looking for a new all-electric car want to buy from a traditional establishment. But the data was collected from only 1,289 Americans which may or may not reflect what the majority would like to do in a similar scenario.
But, in the end, Tesla managed to go on with selling the cars it made to its customers, even if it had to find some clever workarounds in a couple of states. The brand had to make use of tribal land (most recently, in New Mexico) to avoid harsh regulations or invite customers to purchase from other states and have the cars delivered to them at home. In 2019, the company believed so much in its strategy that it moved most of its sales online.
But some of the legal challenges were also transformed into social causes. For example, Tesla requested help from Oklahomans last year. A bill that was going to turn direct sales into a very complicated matter gathered enough support to have the company worried about its operations in the Sooner State.
So, the direct-to-consumer sale model has worked very well for EV makers. Now, other companies that decided to follow the battery-electric route wanted to do the same. Lucid and Rivian, for example, aspired to avoid any problems with dealerships that could cause trouble for their businesses. So they adopted Tesla’s way of doing things, even though Elon Musk warned both companies would be facing bankruptcy at some point. Moreover, even though Ford decided to split its business into two parts, its efforts to adopt the same selling strategy were met with a lot of pushback from its wide network of dealers.
But Lucid and Rivian didn’t have a vast dealership network to worry about. So they followed Tesla’s path and set up great online platforms and remote service operations for their soon-to-be clients. After the first great reviews from early customers, the word got around. Now, the middlemen from Illinois (where Rivian builds trucks and SUVs) had two new EV-making companies to worry about. So they decided to stop them by suing.
The dealership association decided to pursue this costly and complicated path, even though another judge ruled in a different case from 2019 that Tesla was well within the limits of the law when selling directly to buyers.
As Rivian and Lucid expected, the judge said the state of Illinois did the right thing when it awarded the EV makers their dealer licenses. Hence, both companies can continue selling without worrying about what third parties think about their practices.
The Illinois Automobile Dealers Association (IADA) said through an online statement seen by Autonews that it’s disappointed and will think about an appeal. The organization argues that the judge did not want to hear verbal arguments. However, IADA is not yet ready to say if it will go through with this idea.
Finally, a recent survey revealed that new EV buyers like getting their new cars from dealerships. The results said 74% of those looking for a new all-electric car want to buy from a traditional establishment. But the data was collected from only 1,289 Americans which may or may not reflect what the majority would like to do in a similar scenario.
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