'Awkward,' 'Restrictive,' 'Tragic': 3 EV makers told us how US dealership laws hold them back

"“Franchise laws protect consumers as well as dealers that's why they've been part of the fabric of America for many years,” Amy Wright, a spokeswoman for the National Automobile Dealers Association, told Business Insider. “When dealers compete, prices go down, and customers win.”"

"EV makers, founded long after many of the franchise-dealership laws were enacted, say the rules are being used against companies that never had franchise dealers in the first place. Direct sales, they say, let them control pricing, educate first-time EV buyers, and avoid relying on third-party dealers to sell a new kind of vehicle."

"In interviews with Business Insider, Rivian, Lucid, and Scout Motors said this state-by-state system can create a stifling and awkward retail experience: Customers could see a vehicle, service it, or discuss some features, but not test-drive the car, discuss the price, or complete the sale."

"Beau Whiteman, Rivian's director of state public policy, said Ohio shows how “restrictive” some state laws can be. The company filed a lawsuit last year against the Ohio Bureau of Motor Vehicles, challenging the state's restrictions on direct-to-consumer sales. The 17-year-old EV maker can't obtain a dealer license in Ohio, but it can operate service facilities to fulfill warranty obligations, he said."

EV sales are slowing, increasing incentives for EV makers to make vehicles easier to buy. Many companies face state dealership-franchise laws that limit direct sales to consumers. These laws were written decades ago for traditional automakers and franchised dealers. Dealer groups argue the laws protect consumers and encourage price competition. EV makers contend the rules are applied against companies that never had franchise dealers, and that direct sales allow better control of pricing, education for first-time buyers, and reduced reliance on third-party dealers. Companies report that the state-by-state system can create awkward retail experiences, including limits on test drives, price discussions, and completing sales. Rivian cites Ohio as restrictive, noting it cannot obtain a dealer license but can run service facilities for warranty work.

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