EV automaker sues Ohio over direct sales ban, wants to sell like Tesla

COLUMBUS, Ohio (WCMH) -- Rivian, an American auto manufacturer that makes electric vehicles, is suing Ohio over the state's ban on directly selling cars to consumers, adding that Tesla is permitted to do just that.

Currently, Ohioans who would like to purchase a Rivian vehicle must do so out of state and then transfer the car to Ohio, pay the taxes, and then register it. The automaker argues that they are placed at a disadvantage because Tesla's prospective customers do not have to navigate those hurdles.

In the lawsuit, filed Monday against the Registrar of Motor Vehicles in the U.S. Southern District of Ohio, Rivian points out a 2014 law that prevents the issuance of any motor vehicle dealers' licenses to manufacturers. A provision created a carve-out for Tesla, which was already selling cars in the state at the time.

The automaker claims Ohio's ban on direct-to-consumer sales is unconstitutional because it violates the due process and equal protection clauses.

Rivian notes that it is not saying the carve-out for Tesla is unconstitutional, but it's saying that the ban is unconstitutional in the way it's applied to Rivian. The company wants to be able to directly sell cars in Ohio, just like Tesla.

"Ohio's prohibition of Rivian's direct-sales-only business model is irrational to the extreme: it reduces competition, decreases consumer choice, and drives up consumer costs and inconvenience -- all of which harm consumers -- with literally no countervailing benefit," the lawsuit reads.

The automaker argues that there is no reason to distinguish between Rivian and independent franchised dealers, other than to protect existing dealers.

"Ohio's prohibition is pure economic protectionism for the benefit of Ohio's existing auto dealers, putting their profits ahead of consumers," Rivian said in the lawsuit.

The company said it's harder for the state to protect Ohio consumers purchasing Rivian vehicles because they must be purchased out of state, where Ohio can't enforce its laws.

Rivian is allowed to service, repair, and rent its vehicles in Ohio. It can also sell the vehicles to Ohioans from out-of-state dealers and then deliver them to service centers in Ohio, according to the lawsuit.

"Nonsensically, the thing that Rivian cannot do is actually complete the sale of Rivian vehicles in Ohio," the lawsuit reads. "This imposes an extraordinary burden on Ohio consumers and Rivian for no legitimate reason."

The company said it is a licensed dealer in 16 other states. In 2013, Tesla was licensed as a dealer in Ohio, according to the lawsuit, prompting franchise dealers to unsuccessfully sue to get Tesla's license taken away.

The Ohio Automobile Dealers Association, representing franchised dealers, then successfully pushed for a law to ban the direct-to-consumer car sales model, according to Rivian's lawsuit.

"OADA is one of the most politically powerful special-interest groups in Ohio, and OADA and its members donated hundreds of thousands of dollars to political campaigns and committees in Ohio to press this legislative priority," the lawsuit states.

The automaker said that if they're granted relief in the lawsuit, it would apply with the state and take the necessary steps to become a licensed dealer, like it has in other states.

Many states besides Ohio have a ban on direct-to-consumer car sales -- something that Tesla itself has been fighting against for years.

In a statement to NBC4, the Ohio Bureau of Motor Vehicles said it does not comment on pending litigation, "especially lawsuits that seek to invalidate laws passed by the Ohio General Assembly."

NBC4 has reached out to the Ohio Automobile Dealers Association, which is not involved in the lawsuit, for comment on Rivian's criticisms.