- Rivian and Lucid just got a huge win in direct-to-consumer sales.
- Washington lawmakers pushed forward legislation that would enable the brands to finally sell their vehicles in the state.
- This dulls a competitive edge held by Tesla in Washington for over a decade.
As a consumer, you want car buying to be easy. You give a company money, they give you get a car. But in the United States, buying a car from a legacy dealership often means visiting an independently-owned franchise that makes its money from nitrogen-filled tires or other “mandatory” dealer-installed add-ons rather than huge margins based on the sticker price.
Newer electric automakers have looked to bypass that system completely by selling directly to the consumer. The only problem is that laws across the country protect the role of the dealership, and the old guard has a strong incentive to keep things that way. Which is why what just happened in Washington is a big deal not just for prospective Rivian buyers, but any buyer hoping that their next purchase won’t involve a dealership.
Photo by: Rivian
Washington has effectively expanded a long-standing loophole that allowed Tesla to sell cars directly to consumers for the past 12 years, but blocked other brands (like Rivian) from doing the same thing. Washingtonians couldn’t take test drives or discuss pricing at Rivian showrooms in the state. To actually purchase one, they’d need to do the whole process online or travel out of state.
Last week, Washington legislators overwhelmingly passed Senate Bill 6354, sending it to Governor Bob Ferguson’s desk to be signed into law. This new approach widens the door to allow Rivian and Lucid to operate more like Tesla and sell cars directly to consumers without needing a franchised dealership network.
This whole ordeal is part of a broader, ongoing knife fight between longstanding laws and new automakers who want absolutely nothing to do with the traditional dealership model. In fact, lobbyists from some automakers like Honda, Ford, and General Motors openly opposed the bill and argued that it gave electric automakers an unfair advantage.
“They want to bypass the systems in order to gain a huge competitive advantage,” said Honda lobbyist Craig Orlan during a hearing on March 5th. “This legislation would not create a level playing field. It would, in fact, create two sets of rules for the same industry.”
Dealer-franchise laws were originally designed to protect dealers from being steamrolled by automakers. But companies like Tesla, Rivian, and Lucid never had dealer networks to begin with—meaning that they’ve spend years navigating and challenging these archaic laws state-by-state.
Some states have loosened restrictions. But there are still 14 states—Alabama, Arkansas, Connecticut, Iowa, Kansas, Louisiana, Nebraska, New Mexico, North Dakota, Oklahoma, South Carolina, Texas, West Virginia, and Wisconsin—which outright ban direct-to-consumer sales. Washington is just the latest move in an ongoing wave of states that are becoming more in-tune with how consumers are becoming accustomed to purchasing cars in a new era. And it’s an important one, since EV sales are strong in the state.
For Rivian, this legislation couldn’t come at a more important time. Its most important vehicle to date, the Rivian R2, is launching in the next few months. This move makes buying one just a bit easier.
