Rivian files a lawsuit in Ohio to have the same right as Tesla to sell direct to consumers

Rivian Automotive (NASDAQ:RIVN) filed a lawsuit against the State of Ohio challenging a state law that prohibits carmakers from selling vehicles directly to consumers. The Ohio law requires vehicles to be sold through independent, franchised dealers.

Although Tesla (TSLA) was granted an exemption by the state legislature, allowing it to operate a limited number of direct-sale locations in Ohio, Rivian (NASDAQ:RIVN) highlighted that it was not permitted the same opportunity. As a result, Ohio residents who want to purchase a Rivian (NASDAQ:RIVN) vehicle must do so through the company’s direct-sale stores in other states, causing inconvenience and potential extra costs.

In its court filing, Rivian (RIVN) argued that the ban on direct sales not only harms consumers by reducing competition, limiting choices, and making purchases more complicated, but also serves no legitimate state interest. The company pointed out the inconsistency of allowing out-of-state direct sales and in-state warranty repairs, but not in-state purchases. Rivian (RIVN) said the prohibition is irrational and exists mainly to protect the profits of traditional auto dealers at the expense of consumer choice.