Skip to main content

Lucid Wins Direct Sales Lawsuit Against Illinois Auto Dealers

Lawsuit brought against Lucid and Rivian by the Illinois Automotive Dealers Association results in a win for the EV makers.

Join us...    

Lucid and Rivian have emerged victorious from a lawsuit brought against them by Illinois auto dealers over their direct-to-customer sales models. Following the example set and fought for by Tesla both manufacturers have online platforms that allow buyers to purchase their cars without ever setting foot in a dealership and service locations featuring no emphasis on sales. Lucid operates its own network of Studios which allow buyers to familiarize themselves with its products.

Image showing the interior of Lucid's flagship Beverly Hills Studio with examples of the car's motor and battery.
Lucid's Beverly Hills Studio shows examples of the Air's motors, battery, interior textiles and paint colours.

IADA's Case
The lawsuit revolved around the direct-to-consumer sales models employed by the EV manufacturers. Dealer associations are against these models because they cut out the middleman (dealers) in a car buying transaction, resulting in less revenue for the association's members. Tesla is one of the major proponents of the model and as a luxury market leader deprives dealers of an awful lot of revenue as a result. Other manufacturers like Lucid, Rivian and in the future Fisker and VinFast see it as a way to eliminate hold-ups and streamline the purchase process for both seller and buyer.

Image showing a partially assembled Rivian R1S on the production line at the factory in Normal, Illinois.
Rivian builds its vehicles at its factory in Normal, Illinois.

Tesla has often faced opposition from dealers over its direct sales model and has had to resort to a "by hook or by crook" mentality to work around bans on manufacturer also acting as dealer. Methods for doing this have included getting buyers to place orders in states where no such bans exist before shipping the vehicles on to their home addresses.

Ruling
Contrary to the IADA's wishes, Associate Judge David Atkins ruled on December 19th that the state of Illinois was perfectly justified in giving Lucid and Rivian their dealers licenses back in 2021, giving them the go-ahead to continue selling direct-to-consumer in the state. The IADA is reportedly considering an appeal and released this statement to Automotive News:

"Disappointingly, after sitting on all of the parties' various motions for over a year and after admitting less than a week ago (mid-December) that the matter had slipped through the cracks, the judge issued an order dismissing the lawsuit without providing opportunity for oral argument."

For the time being Lucid and Rivian's sales models will stay legal in Illinois, with Judge Atkins stating that the state's refusal to make such practices illegal shows its intent to allow auto manufacturers to continue cutting out the middleman in the future.

Related Story: Lucid Stock Rises On EV Sector's 2022 Growth

Images by Lucid Motors and Rivian licensed by CC BY 4.0.

James Walker is an Automotive Journalist at Torque News focusing on Lucid Motors. If it's got wheels he's interested, and he's looking forward to seeing what kind of cars the EV revolution brings us. Whether it's fast, slow, new, or old, James wants to have a look around it and share it in print and on video, ideally with some twisty roads involved. You can connect with James on Twitter, Instagram, and LinkedIn.

Join us...