Rivian has been given the go-ahead to continue selling vehicles directly to consumers in Illinois.
Associate Judge David Atkins concluded on December 19, 2022 that the Illinois secretary of state was correct in issuing dealer licenses to both Rivian and Lucid in 2021, dismissing a lawsuit by the Illinois Automobile Dealers Association that was challenging the ruling.
Illinois decided not to follow the lead of some other states in explicitly banning the direct sales of new vehicles. As such, Judge Atkins said it had left the door open for direct sales like those conducted by Rivian, Lucid, and Tesla, to be conducted in the state.
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“The Illinois legislature has had ample opportunity, and has at least once expressly considered explicitly prohibiting manufacturers of automobiles from being licensed as dealers thereof,” Atkins wrote. “It has declined to do so, and it is thus reasonable to conclude that it had no such intent.”
The judge added that while franchised dealers have become the dominant sales model for new vehicles, he noted that Illinois law has never actually required new vehicles to be sold through franchised dealers.
“The automobile industry may have largely adopted the ‘Established Franchise System’ over many decades, and Illinois law may have even been updated to reflect and better regulate that reality, but that does not mean it ever required such as system,” he said. “It is evident that franchisees are not the sole contemplated form of dealer. This is further supported by various provisions referencing dealers with a ‘franchise or selling agreement,’ apparently contemplating other types of arrangements.”
The Illinois Automobile Dealers Association said it is disappointed in the ruling and will decide on an appeal after the holiday period, Auto News reports.
“Disappointingly, after sitting on all of the parties’ various motions for over a year and after admitting less than a week ago [mid-December] that the matter had slipped through the cracks, the judge issued an order dismissing the lawsuit without providing opportunity for oral argument,” the IADA said.
