Dealers still don’t exist because someone asks them to, really, but because state franchise laws, which largely prevents carmakers from selling directly to consumers. Which means that any threat to these laws makes dealers very hot under the collar. The latest evidence in this regard is a new lawsuit against Illinois, Rivian and Lucid.
costume was filed on Thursday on behalf of a group of dealers, the Illinois Automobile Dealers Association, and dozens of other claimants, mostly individual representatives throughout the state.
The lawsuit seeks to stop Rivian and Lucid from selling directly to consumers in Illinois, because dealers claim that this is against the law. Tesla is currently operating locations in Illinois under an agreement reached in 2019, which dealers agreed because they believed the Illinois franchise law would be more stringent in the future. Thursday’s costume is an attempt to stop any possibility of Lucid and Rivian, based in Normal, Illinois, from playing by Tesla’s rules.
“We welcome new manufacturers in Illinois, especially those who build innovative vehicles,” said David Sloan, president of the Chicago Automobile Trade Association, another party to the lawsuit. “Our franchised members are already selling dozens of electric and hybrid vehicles. We ask manufacturers to sell them in Illinois in accordance with state law. We are not asking the state to cease operations, but only to franchise a dealer. ”
And while the civil lawsuit that dealers have filed offers a lot of legal reasons why they should win – the Illinois deal with Tesla seems odd – dealers also claim to do so on behalf of consumers, where I get lost instantly.
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Through their press release:
The benefits to consumers and the Illinois economy generated by more than 700 dealers operating 2,300 franchises across the state are under discussion. These benefits include:
- Consumer protection: Dealers maintain service centers with trained personnel to perform all revocation and warranty repairs, where dealers act as consumer advocates together with manufacturers.
- Availability of parts and service: dealers keep an inventory of parts and provide timely services to consumers who depend on the daily use of their vehicles.
- Price competition: consumers have many options, competition between dealers saving money for buyers. Direct sales from producers result in a monopoly that offers no price benefit.
- Community Benefits: Franchised dealers are long-term local companies that generate millions of dollars in revenue and economic development, employ 42,000 people statewide, and support many local causes and events.
All these arguments are pretty stupid, but my favorite is theirs claiming direct sales results in a kind of monopoly. No wonder Tesla is doing so well.
Anyway, for my money dealers would be better served by recognizing who they are: manual intermediaries. “We exist because we have the law on our side for the time being and we will fight to keep it that way. “ he might say. It wouldn’t be the most attractive argument, but at least it would be honest.
You can read the full complaint below.