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Rivian is being sued by two Illinois dealer networks over direct-to-customer sales

The lawsuits seek to force Rivian and other new manufacturers to follow the traditional franchised dealer model used by most automakers.

- 01:22
Rivian R1T

Rivian's R1T and R1S look promising, but the company's planned direct-to-customer sales model might be in for a challenge.

Richard Giordano/Rebelle Rally

If there's one thing we've learned about car dealers as a result of Tesla's big push to sell directly to customers, it's that they hate it when car companies try to sell directly to customers. They hate it so much that they will often take legal recourse to prevent it from happening, and that's just what a pair of dealer groups from Illinois are doing to Rivian, according to a report published Friday by the Chicago Business Journal.

The lawsuit against Rivian is being brought by the Illinois Automobile Dealers Association (IADA) and the Chicago Automobile Trade Association (CATA) after the Illinois Secretary of State's office decided to allow Rivian and other EV manufacturers to sell without a franchised dealer network.

The lawsuit specifically seeks a ruling by the state that forces new vehicle manufacturers to abide by the same regulations as existing ones -- specifically, the one that says that manufacturers must sell through a licensed franchised dealer. 

This ruling would also affect companies like Lucid, which also wanted to sell directly to customers and planned on opening a vehicle showroom in Oak Brook.

These are similar tactics that we've seen from other automakers when Tesla first tried to push its direct-to-customer model. This ended up with folks in Michigan having to go to Ohio to get their Teslas and to have them serviced. However, that situation has relaxed a bit in the intervening years.

Rivian's vehicle production facilities are based in Normal, Illinois, and the company was planning on opening a showroom in Fulton Market in Chicago.

We reached out to Rivian for comment but didn't hear back in time for publication.

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