Sue Rivian, Lucid and Illinois dealers on direct sales

Dealers still don’t exist because whoever asks for them, really, but because of state franchise laws, which largely prevent automakers from selling directly to consumers. Which means that any threat to these laws makes the dealers very, very hot under the collar. The latest evidence is a new lawsuit against Illinois, Rivian and Lucid.

The suit was filed Thursday on behalf of a group of dealers, the Illinois Automobile Dealers Association, and numerous other plaintiffs, primarily individual dealerships located across the state.

Suit seeks to stop Rivian and Lucid from selling direct to consumers in Illinois, as dealers claim, this is against the law. Tesla currently operates locations in Illinois under a 2019 deal, which dealers agreed to because they believed Illinois franchise law would be enforced more strictly in the future. Thursday’s lawsuit is an attempt to prevent any possibility of Lucid and Rivian, who is based in Normal, Ill., Of play by Tesla’s rules.

“We welcome new manufacturers to Illinois, especially those building innovative vehicles,” said David Sloan, president of the Chicago Automobile Trade Association, another party to the lawsuit. “Our franchise members already sell dozens of electric and hybrid vehicles. We ask manufacturers to sell them in Illinois according to state law. We are not asking them to go out of business in the state, but simply to franchise a dealership. “

And while the civil lawsuit filed by the dealers offers plenty of legal reasons why they should win – Illinois’ deal with Tesla seems odd – dealers also claim they are doing it on behalf of consumers, it is there that they lose me instantly. .

Via their press release:

What is at issue are the benefits to consumers and the Illinois economy generated by more than 700 dealerships operating 2,300 franchises across the state. These benefits include:

• Consumer Protection: Dealers maintain service centers with staff trained to perform all recall and warranty repairs, where dealers act as consumer advocates to manufacturers.
• Parts Availability and Service: Dealers maintain a parts inventory and provide prompt service to consumers who depend on the day-to-day use of their vehicles.
• Price Competition: Consumers have many choices, with dealer competition saving buyers money. Direct sales from manufacturers result in a monopoly that offers no price advantage.
• Community Benefits: Franchised Dealers are long-established local businesses that generate millions of dollars in revenue and economic development, employ 42,000 people statewide, and support many local causes and events.

All of these arguments are pretty stupid, but my favorite is their claim that direct sales result in a kind of monopoly. No wonder Tesla is doing so well.

In short, for my money dealers would be better served by admitting who they are: textbook intermediaries. “We exist because for the moment we have the law on our side and we will fight to keep it that way ” they could tell. It wouldn’t be the most appealing argument, but at least it would be honest.

You can read the full complaint below.