Rivian fighting OHIO for dealership License

rivian fighting OHIO for dealership license

Episode Transcript

(00:17):
Automaker Rivian has filed A lawsuit against Ohio's Bureau of
Motor Vehicles after the agency blocked the EV maker from
selling directly to consumers inthe state.
Now, Tesla can already sell vehicles like this this fashion
directly to customers in Ohio. So what would stop Ohio or what

(00:40):
would stop Rivian from doing thesame thing?
I don't know. This legal action challenges
Ohio's decision to reject Rivian's application for a
dealer license, which is required for in state sales.
Rivian claims the denial violates state laws and unfairly
protects traditional dealerships.
So this dispute began when Rivian applied for a license to

(01:00):
operate a showroom in Columbus. Great city, Been there much a
bunch of times. This is where customers could
purchase vehicles directly from the company.
The Ohio BMV denied the request,setting laws that prevent
manufacturers from competing with franchise dealers.
Now, Rivian argues those laws were intended to prevent
manufacturers from competing with their own franchises, not

(01:23):
to block companies that have no franchise network at all.
Rivian sells direct to customers.
There are no franchisees, Nobodybuys a Rivian franchise, and
there's no Rivian dealerships, so dealerships don't mark up the
price. Rivian sells directly to you and
that's it. And Ohio thinks it's OK to block

(01:47):
Rivian from doing that. Rivian says that the denial
harms consumers by limiting how they can buy its own vehicles.
If you want to spend $50,000, you should be able to spend
$50,000 is what they're saying. The company notes that without
the license, though, Ohio customers must purchase Rivian
models online and then arrange for delivery from outside of the

(02:08):
stage, which complicates serviceand registrations.
Ohio currently allows Tesla to operate under a similar
agreement. Borivian claims its own
application received unequal treatment.
Now, the lawsuit points to a broader legal battle in multiple
states over direct to consumer sales.
Many states still have dealership franchise laws from

(02:29):
decades ago that restrict how automakers can sell vehicles.
Some go back to fifty, 60-70 years ago.
Newer EV manufacturers without dealership networks have fought
with those laws, arguing that that they protect established
dealers from competing rather than serving consumers.
In its court filing, Rivian states that Ohio's actions

(02:50):
contradict the intent of its motor vehicle laws.
The company says those laws werenever meant to block entirely
new manufacturers from selling to residents.
Rivian seeks a court order requiring the BMV to approve its
license and allow in state saleswithout going through
independent dealerships. It would ruin the whole model if
they had to have independent dealerships to sell their EVs.

(03:14):
And Ohio's dealership groups have defended the existing
rules, saying they ensure fair competition and protect buyers
by providing local service options.
Rivian counters that it already owns and offers warranty service
and repair support in the state,though, and that it direct sales
models allows better pricing transparency and consumer

(03:35):
experience. The case in Ohio mirrors legal
disputes Rivian faces in other states, including Georgia and
Texas, where dealership laws prevent it from selling directly
to customers. Now, Rivian is also rumored to
be building a manufacturing plant in Georgia.
So if they can manufacture in Georgia, why wouldn't they be

(03:55):
able to have a dealership here? That's weird.
Now, these cases have become a recurring obstacle for new EV
manufacturers, many of which aimto bypass traditional sales
channels entirely. Now, the outcome of Rivian's
Ohio lawsuit could influence howother states handle similar
applications. Court ruling and Rivian's favor
might weaken the enforcement of dealership restrictions in

(04:17):
states with similar laws. And a loss could also strengthen
dealership lobbying efforts to keep direct sales banned.
Now dealerships that are lobbying against this, guess why
Rivian is a competitor. Rivian is new.
They're sort of like the rugged Tesla.

(04:38):
They are sort of like the Subaruof Tesla.
If you want to go camping or something, you buy Rivian.
I mean Teslas are great for it. Sometimes Model YS are great for
it. Model X not bad.
Cyber truck weird, but also probably pretty good for camping
though it's all metal and that probably gets hot under the sun.

(05:00):
You don't want to be sleeping inthe morning in a hot Tesla.
I know there's air conditioning,but if you set it up, a Rivian
is designed for those things. It's designed for camping and
glamping and being outdoors and climbing up mountains with a
thing. So they are sort of like the
Subaru without the love of E VS right now.

(05:26):
Now with that being said, the traditional dealerships are
lobbying against Rivian because they see them as a threat.
If they didn't see this as a threat, then they wouldn't say
anything. They wouldn't care.
Just another car dealership, nota big deal.
But because they see it as a threat and they see Tesla as a

(05:48):
threat too. And they have been lobbying
against Tesla doing direct salesin every single state.
And Tesla's been fighting them tooth and nail to be able to
sell in every single state. And Rivian has to do the same
thing, even though Tesla has setlegal precedent in Ohio.
So and Rivian is going to expandproduction and deliver their

(06:11):
trucks and if SUVs across the USno matter what happens.
But the company also says that restrictive state laws slow its
growth in certain regions. So this lawsuit signals that
Rivien's willingness to confrontthese rules head on rather than
adapt its sales model to comply with them.
They're going to fight this, andthey're probably going to win.

(06:32):
And, you know, if they win, consumers win, too.
And maybe this will just push companies like Ford, also
Subaru, like I mentioned before,all the big automakers to do the
same thing. Do you want the markup of a
dealership or do you want to buydirect from the manufacturer?

(06:56):
And the manufacturer would probably mark it up anyway.
But The thing is, do you want tobuy from a dealership who is
kind of slimy? Because most dealerships aren't
the best people to work with, tobe honest with you.
So buy direct, order it online to see somebody real quick.
Be like, I want this vehicle, doyou have it cool.

(07:17):
If not, can you get it in? Cool.
OK, shipped to my house. It's a great thing.
So I don't see any problem with selling direct.
Everybody else sells direct witheverything.
But I guess autos are a certain price range that people in power
don't want you to buy directly. Numerous reasons.
Lobbyists, scummy lobbyists. Of course they want.

(07:42):
They don't want this to happen because they want all the money.
That's it. It comes down to money.
Follow the money and you'll see who's lobbying against this.
I'm all for EVs to be bought directly from the manufacturer.
Tesla, Rivian, everybody buy it directly from the manufacturer.
But also ICE cars buy those directly from the manufacturer

(08:05):
too. Let me know what you think.
If your podcast platform has comments, I want to hear from
you. I want to know what you think
about Rivian selling direct to consumers.