Illinois auto dealers are suing the state and electric truck startup Rivian for cutting out the middleman and selling vehicles directly to consumers.
The lawsuit, filed Thursday in Cook County Circuit Court by the Illinois Automobile Dealers Association, other trade associations and a long list of dealers, alleges the Secretary of State’s office “is turning a blind eye to Rivian’s unlicensed sales operations” in violation of state law requiring franchised dealers to sell new vehicles.
Lucid Motors, a California-based EV startup planning to open a sales studio in Oak Brook this year, also is named as a defendant.
“We have no choice but to file this lawsuit, both to protect consumers as well as the hundreds of franchised dealers across the state who contribute to the local economy,” Pete Sander, president of the Illinois Automobile Dealers Association, said in a news release Friday.
The association, which represents more than 700 auto dealers operating 2,300 franchises across the state, cited the Illinois Vehicle Code and the Illinois Motor Vehicle Franchise Act as mandating all vehicle sales to the public “must be made through licensed and independent franchised” dealers.
Leslie Hayward, head of policy communications for Rivian, declined to comment. A representative for Lucid Motors could not immediately be reached.
Rivian is gearing up to begin production in June of its electric truck and SUV models, which will be built at a converted Mitsubishi plant in Normal. The plant is expected to surpass 1,000 employees next week, Rivian spokeswoman Amy Mast said Friday.
The automaker began taking advance orders online in November. Rivian plans to open a showroom in Chicago’s Fulton Market district this year.
Illinois auto dealers have been down this road before, challenging electric automaker Tesla after it shook up the automotive world with the debut of its Model S in 2012, and its direct-to-consumer sales model.
In May 2019, the auto dealers, the Secretary of State and Tesla entered into an administrative consent order agreeing that Tesla could have no more than 13 dealer licenses in Illinois.
The deal was limited only to those locations and “included an assurance that the Illinois Secretary of State would not issue licenses authorizing direct sales to any additional manufacturers,” Sander said in an email Friday to the Tribune.
In July 2020, the Illinois attorney general’s office issued “an informal opinion” stating that the motor vehicle law does not expressly require new manufacturers to establish franchise dealerships to sell their vehicles, opening the door for Rivian and Lucid to launch their own direct-to-consumer sales networks, the lawsuit alleges.
Dave Druker, a spokesman for the Secretary of State’s office, said the lawsuit will be reviewed and discussed with the attorney general’s office.
“We will review the complaint when we receive it,” Illinois attorney general’s office spokeswoman Annie Thompson said.