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Rivian Sued By Illinois Dealers Over Direct Sales Model

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Rivian, like Tesla and Lucid Motors, is planning on implementing a direct sales model that would circumvent physical dealerships and allow consumers to purchase vehicles online or via an app. This practice is becoming more prevalent by the day, and even Ford recently introduced a new online used vehicle platform, as well as a way for new car buyers in Mexico to buy a vehicle without setting foot in the dealership – though they are still buying the vehicle from a dealer. Now, however, Illinois dealers are fighting back against the direct-to-consumer sales model.

Both the Illinois Automobile Dealers Association and Chicago Trade Association have filed a lawsuit against Ford and Amazon-backed Rivian, Lucid Motors, and the state of Illinois as both prepare to open vehicle showrooms in Oak Brook and Chicago. Tesla currently has a license from the state to sell cars directly to consumers, however, dealers were under the impression that this was a one-time exemption.

According to the lawsuit, the state of Illinois informed Rivian that it would need a dealer’s license to open its planned showroom in Chicago, but the automaker has yet to apply for the license. Meanwhile, both Rivian and Lucid are taking deposits for vehicles online with plans on opening their showrooms in the coming months.

In addition to its Chicago location, Rivian also recently announced that it had signed its first lease in New York City, and it intends to open its first retail store there in the Williamsburg neighborhood of Brooklyn. The New York location will join Chicago and California retail stores, in addition to 41 planned service centers across the U.S.

Consumers won’t be able to purchase vehicles from these showrooms. However, the idea is to provide a physical location where interested parties can check out the vehicles up close, or potentially even test drive them, as is the case at Tesla locations, prior to ordering them online.

We’ll have more on Rivian and this pending lawsuit soon, so be sure and subscribe to Ford Authority for the latest Rivian news, Ford lawsuit news, and 24/7 Ford news coverage.

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Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comment

  1. John

    Direct sales of motor vehicles is not a new concept, just that it is gaining acceptance from within the manufacturing community. It was at least 30, maybe 40 years ago when Ford floated the ideas surrounding how dealerships would function in the future. True, in automotive infancy, all you could do was buy directly from a car manufacturer – then that car would eventually show up by train and the whole town would pour out to see the latest mechanical contraption that spooked their horses.

    Fast forward and it may have been a combination of supply shortages, just in time manufacturing or some other maxims that would have placed a McDonald’s style ordering kiosk inside each Ford-Lincoln-Mercury dealership. Investigate thoroughly the one example of each model and then step up to the kiosk and place your specific order. 3-6 weeks later take delivery. Hey, over the past 50 years I have ordered at least 5 brand new vehicles built to my specs. Ordering a new Bronco was not really any different. I did not have to travel to the dealership to convert my reservation, although I did and it helped with my color choice.

    And, other than possibly requiring a dealer license, Carvana, Vroom et al will ship you a used vehicle with no physical face to face interaction between dealership and consumer required. What purpose does it serve for a new car dealer to stockpile 6-9 months supply, sitting out in the hot sun or freezing rain when fine tuning the supply chain and focusing production on sold orders first could cut lead time for an ordered vehicle from 6 weeks to 6 days.

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