Rivan Wins Lawsuit Against Illinois Dealers After Judge Dismisses Case

Jan. 08, 2023 3:33 PM ET byChase Bierenkoven Government /9 Comments

An Illinois judge says Rivian can sell directly to buyers now.

Automotive Newsreports Rivian, makers of theR1Telectric truck and R1S SUV will be able to sell directly to consumers in its home state of Illinois. The verdict, handed down on alawsuit filed against Rivian, will also affect luxury EV automaker Lucid, its Gravity SUV, and itsAirsedan.

The suit, filed by the Illinois Automobile Dealers Association (IADA), was dismissed by Associate Judge David Atkins on December 19. Atkins ruled that the Illinois secretary of state was right to issue dealership licensing to both Rivian and Lucid two years ago. The secretary of state had also done so previously for Tesla.

Arguing against Rivian and Lucid, the IADA stated that under state law, only third-party franchisees (for example, Bob Smith Honda of Chicago) may sell new vehicles to consumers. The secretary's earlier issuance of permits to Tesla arguably created precedence that has since overruled state law, at least in the eyes of Associate Judge Atkins. The verdict can be appealed per Illinois law.

"The Illinois legislature has had ample opportunity, and has at least once expressly considered explicitly prohibiting manufacturers of automobiles from being licensed as dealers thereof," reads Atkins' verdict. "It has declined to do so, and it is thus reasonable to conclude that it had no such intent."

Meanwhile, Lucid's campaign to overturn the traditional dealership model for itselfcontinues in Texas, where it has filed a lawsuit against what it calls the "economic protectionism" of Texas dealer laws. That suit is still ongoing. Rivian, meanwhile, has also earned the right to sell to consumers in Colorado, where its challenge of dealership laws changed the rules in the state.

Other traditional automakers continue to flirt with the idea of ending, or at the very least modifying, their relationship with dealers after the pandemic and the years since have seen price-gouging across the country by dealers. Ford, for example, will work on a partial direct-to-consumer modelat some point in the future.