Rivian has filed a federal lawsuit against the State of Ohio, challenging its partial ban on direct-to-consumer vehicle sales. The electric vehicle (EV) manufacturer argues that the law is not only outdated but also unjustly favours Tesla, which was granted a unique exemption allowing it to sell vehicles directly to customers at three locations across the state.
The lawsuit, filed in the U.S. District Court for the Southern District of Ohio on Monday, names the Ohio Bureau of Motor Vehicles (BMV) as the defendant and claims that the 2014 law banning direct sales by automakers is unconstitutional and anti-consumer. Rivian’s legal team describes the legislation as “irrational in the extreme,” stating that it stifles competition, reduces consumer choice, and increases costs for Ohio residents. (via The Verge)
Rivian currently operates service centers in Cleveland, Cincinnati, and Columbus, where it handles maintenance, deliveries, and even vehicle rentals. However, under current state law, the company cannot finalize a vehicle sale within Ohio. Customers must purchase Rivian vehicles from out-of-state locations, often coordinating pickup at local service facilities.
Rivian says that this process imposes unnecessary logistical burdens on both consumers and the company.
The EV startup emphasizes that its business model relies entirely on direct sales, without franchised dealerships. This model, widely adopted by next-generation automakers, allows companies like Rivian to maintain control over the customer experience and pricing. While Ohio’s ban was implemented to prevent monopolistic behavior from legacy automakers, Rivian argues it is now being used to protect entrenched dealership interests rather than consumers.
Central to Rivian’s complaint is Tesla’s exception. Although Ohio’s direct sales ban was passed in 2014, Tesla had already been operating two retail locations in the state and was later permitted to open a third, even after the law’s enactment. Rivian argues that this special treatment constitutes an unfair and anti-competitive carveout, especially as it is blocked from obtaining the same rights.
“Ohio’s prohibition is pure economic protectionism for the benefit of Ohio’s existing auto dealers, putting their profits ahead of consumers,” Rivian wrote in the lawsuit. (via The Verge)
This marks Rivian’s first time taking legal action against a state over direct sales restrictions, though the company has previously faced legal challenges in Illinois, where it ultimately prevailed. Other EV startups, such as Lucid Motors and Volkswagen’s Scout brand, are also pushing back against similar bans in various states.
