Rivian and Lucid Win Right to Sell Their EVs Directly to Buyers in Washington State (msn.com) 58
The Wall Street Journal reports that Rivian "just won a yearslong battle with car dealers in Washington state that threatens the model of how cars are sold."
After fighting to sell its vehicles directly to buyers, Rivian threatened to take its case to voters with a ballot measure to permit direct sales. The dealers blinked. The state's dealer lobby not only dropped its opposition to a sales loophole for Rivian and rival EV-maker Lucid, but also encouraged lawmakers to approve one. The measure became law this month...
New auto entrants like Rivian, and Tesla before it, have spent years contending with long-established U.S. state laws that require new cars to be sold through independent franchised dealers. The auto startups — typically makers of EVs — argue that they can offer a better experience by selling directly to consumers, much as Apple sells iPhones through its own stores and online. Rivian CEO RJ Scaringe has said the company is committed to direct-only sales because it's more profitable and gives the company control over how its vehicles are sold, marketed and maintained. The Washington compromise riled traditional automakers, including General Motors, Ford and Toyota, which lobbied against it, arguing it unfairly advantages startups. A trade group representing the automakers called it discriminatory and argued the exception could one day open the door to Chinese EV makers...
German automaker Volkswagen is currently facing several lawsuits from dealers over its plan to sell new Scout vehicles directly to consumers. Dealers say independent franchises are vital to the car-buying process, creating competition between dealerships that keeps prices affordable for consumers, while providing valuable services such as repairs, warranty work and financing... Yet for Washington's dealers, the prospect of putting franchise laws up for a popular vote laid bare a tough reality: given the choice, many car buyers want the freedom to avoid dealerships. Rivian's polling, which the company shared with lawmakers, showed nearly 70% of respondents favored allowing direct sales when asked whether they would support manufacturers selling cars directly to consumers...
The fight comes at a critical time for Rivian, which is launching a new, more affordable SUV in a bid to make consistent profits amid a downturn in U.S. EV sales... Rivian is able to directly sell cars in roughly half of U.S. states, but a number of them limit how many locations the company can operate. They can't disclose the price, though. For that, customers must go online.
The article notes that "Following the win, Rivian executives are eyeing other states that, like Washington, ban direct sales but also allow ballot initiatives: Arkansas, Ohio, Oklahoma, Montana, Nebraska and South Dakota..." It adds that lawmakers (from both parties) in the state of Washington had said "they have long felt pulled between giving consumers more car-buying freedom and protecting dealers, essentially small-business owners who are vital to local economies — and politically powerful."
But an executive at the Washington State Auto Dealers Association said dealers supported this new law partly because it protects them by barring future automakers from selling directly in the state, and by requiring Rivian and Lucid to adhere to the same regulations that govern how dealers operate.
New auto entrants like Rivian, and Tesla before it, have spent years contending with long-established U.S. state laws that require new cars to be sold through independent franchised dealers. The auto startups — typically makers of EVs — argue that they can offer a better experience by selling directly to consumers, much as Apple sells iPhones through its own stores and online. Rivian CEO RJ Scaringe has said the company is committed to direct-only sales because it's more profitable and gives the company control over how its vehicles are sold, marketed and maintained. The Washington compromise riled traditional automakers, including General Motors, Ford and Toyota, which lobbied against it, arguing it unfairly advantages startups. A trade group representing the automakers called it discriminatory and argued the exception could one day open the door to Chinese EV makers...
German automaker Volkswagen is currently facing several lawsuits from dealers over its plan to sell new Scout vehicles directly to consumers. Dealers say independent franchises are vital to the car-buying process, creating competition between dealerships that keeps prices affordable for consumers, while providing valuable services such as repairs, warranty work and financing... Yet for Washington's dealers, the prospect of putting franchise laws up for a popular vote laid bare a tough reality: given the choice, many car buyers want the freedom to avoid dealerships. Rivian's polling, which the company shared with lawmakers, showed nearly 70% of respondents favored allowing direct sales when asked whether they would support manufacturers selling cars directly to consumers...
The fight comes at a critical time for Rivian, which is launching a new, more affordable SUV in a bid to make consistent profits amid a downturn in U.S. EV sales... Rivian is able to directly sell cars in roughly half of U.S. states, but a number of them limit how many locations the company can operate. They can't disclose the price, though. For that, customers must go online.
The article notes that "Following the win, Rivian executives are eyeing other states that, like Washington, ban direct sales but also allow ballot initiatives: Arkansas, Ohio, Oklahoma, Montana, Nebraska and South Dakota..." It adds that lawmakers (from both parties) in the state of Washington had said "they have long felt pulled between giving consumers more car-buying freedom and protecting dealers, essentially small-business owners who are vital to local economies — and politically powerful."
But an executive at the Washington State Auto Dealers Association said dealers supported this new law partly because it protects them by barring future automakers from selling directly in the state, and by requiring Rivian and Lucid to adhere to the same regulations that govern how dealers operate.
I live in Washington state (Score:4, Interesting)
I'm glad Rivian won, even though I'm unlikely to spend that kind of money on a car.
I've bought multiple cars over the past several decades. Buying cars from a dealership SUCKS. The only halfway-decent buying experience I've ever had was with CarMax.
Re: (Score:2)
I'm glad Rivian won, even though I'm unlikely to spend that kind of money on a car.
I've bought multiple cars over the past several decades. Buying cars from a dealership SUCKS. The only halfway-decent buying experience I've ever had was with CarMax.
I'm not glad that exceptions passed because i'd rather it were used somehow (e.g. via appeals courts) to force sunsetting the dealer system in the US.
But still, maybe if Rivian survives then they and Tesla can serve as a counter example that the alternative is better and maybe that'll push legal change.
(also ... https://www.youtube.com/watch?... [youtube.com] Chip. a relevant (*) chracter who i'd forgotten came to a bad end).
*) if you accept the conceit that ATHF is, or even can be, relevant to anything
Re:I live in Washington state (Score:5, Insightful)
Bottom line is that direct sales vs. dealer experience does not have a clear cut winner for consumers. I do however strongly believe that both should be allowed by law. This explicit allowing one manufacturer at a time political bribing shit in WA state is just government corruption (happens in other areas to, check out automatic card shufflers allowed in WA as an example, or charter school licenses). I say let people choose, do they wan to buy from a dealer or direct from manufacturer, let he market decide what the people want. Heck, allow the same manufacturer to sell via dealer and direct, see what people choose. I bet such a choice would spurn competition for dealers to show people why it's worth it buying from them. And yes, I get that it would cost some dealers profits, in situation where they require people to buy a bunch of their cars to qualify for an allocation for a special car (e.g. Porsche 911 GT3 RS), or charge Additional Dealer Markup on top of MSRP (e.g. Corvette).
Re:I live in Washington state (Score:5, Insightful)
I say let people choose, do they wan to buy from a dealer or direct from manufacturer,
I say do not let manufacturers choose, mandate that they release all documentation and software they create internally for service purposes. That's what's going to free consumers from tyranny of manufacturers and stealerships.
Re: (Score:2)
wouldn't even cover a yellowing screen under warranty in a less than one year old six digit priced Model S.
That isn't a dealer vs direct issue. Neither model can protect against shitty vendors not handling warranty they way they are obliged to. Additionally the "competition" from dealerships doesn't help here either as it's not like some other dealer will do your warranty for you when you deal with your shitty point of contact.
That is also when I realized that the manufacturer owned service service means there is no competition
That has nothing to do with sales or dealerships. I bought my car direct from the manufacturer, through their website, and yet get it serviced like normal at the local garage down the road
Re: (Score:2)
Perhaps you did not buy a Tesla. They are probably the most service-hostile vehicle ever sold in the US. Not sure about the UK, I haven't heard stories (horror or otherwise) about service for Chinese EVs yet. They would have to try really hard to be worse than Tesla, though.
Re: (Score:2)
Buying cars from a dealership SUCKS.
It does suck, but if I had to pay full sticker price for a car with no negotiating (even if it does take all damn day), I'd probably just have my work vehicle and an e-scooter. Screw $4/gal gas.
Ironically, there's probably some folks on a particular subreddit that would consider one less car in private ownership to be a good thing, even though my car happens to be an EV (just not one of those fancy expensive ones).
Re:I live in Washington state (Score:4, Insightful)
Sure, you don't want to pay full sticker price, because that's the sucker price. You have to waste a day of your life haggling with the dealer so that he can charge different prices to different customers. If you buy straight from the manufacturer under a no-haggle system, they have to offer the same price to everybody. So it's likely to be quite a lot less than the sticker price of a dealership-sold car. The manufacturer still wants to segment the market and milk more money out of less price-sensitive customers, but they have to do it by selling more luxurious trim levels.
Re: (Score:2)
Usually, I think when people say they want the option to buy directly they're not expecting dealerships to go away entirely. We'd probably end up with something like how it works now with Apple, where if you need the product right away and aren't interested in waiting for a deal from a 3d party retailer (like how Target and Best Buy regularly seem to put iPads on sale), you can just buy direct from the manufacturer's store.
Dealerships would be where you go to waste the entire day playing games with incenti
Re: I live in Washington state (Score:2)
The last time I bought a used car we found out the entire rear crossmember was rotted out to the point that it looked like lace with the rust holes. Fortunately we were able to find another crossmember used and it was a bolt on part but never again. I could have taken it to a mechanic to get checked out I guess but that's a huge hassle. It had just passed a structural safety a year ago too.
Re: (Score:2)
Re: (Score:2)
Ok so lets agree that you need to know a lot about cars to buy a used car, and you need to run in circles protecting yourself. Which is all I was trying to say.
Actually I do know a lot about cars, but it was 30C below and it was getting dark at 5pm and no I wasn't going to crawl under the car. I trusted the person selling it to me and the mechanic that did the safety. The guy even told us where he worked. Sad that it isn't enough.
Re: (Score:2)
Yeah, same, CarMax was ok.
What stops them from becoming an 'independent dealership' ?
Re: (Score:2)
Every transaction with a dealership is a rip off. Even after agreeing on a price they will submit a higher price to the financing company (even if you didn't want financing, because they "can't do that price without financing".
I never buy anything new though anymore. I did lease a new car once, but that also is a no-no. I don't mind fixing high-mileage things as long if I save $40k off the original price.
No one wants to visit a dealership (Score:5, Informative)
many car buyers want the freedom to avoid dealerships.
And this is a surprise? Car salespeople regularly rank as some of the most distrustful and dishonest people in America (depending on the poll, politicians rank higher than car salesmen for dishonesty and distrustful).
Re: (Score:3)
Depends (Score:2)
In a dealership you can sit in the various models available and do test drives. Not sure how that'll be possible buying direct. Also what happens when its service time? Will the manufacturer come and pick it up from your home or will you have to take it to them whereever that maybe? Perhaps they'll be happy giving independents all the info they need to do servicing but I won't hold my breath.
Re: Depends (Score:2)
The Apple Store is a great model. Several demos to try, reasonably informed sales people whose income is not directly dependent on sales. Can go play, cane take home the most popular model or order direct with precision.
Incidentally, luxury brand dealerships are relatively comfortable, even in the used section. I bought a toyota from a lexus dealer and it was the smoothest buying experience Iâ(TM)ve had since I bought a 1950 Ford truck off an old farmer.
Re:Depends (Score:4, Informative)
Re: (Score:2)
Tesla has showrooms & test drives (Score:2)
Tesla's done test drives for years, even here in Texas where they're not allowed to do direct sales. Due to state law they call the storefronts "galleries" where you can check out (and sit in) the different models and take them for test drives, though they're not allowed to discuss price or help you order the car.
In 2020 I tweeted about my folks' test drive [x.com] of the Model Y as they were deciding between getting a Model 3 like mine or the larger Model Y. They ended up buying a Y [x.com].
You can schedule test drives [tesla.com]
Re: (Score:3)
The old guard bribed these restrictions (Score:5, Insightful)
into place to protect their oligopoly. Some blame it on "socialism" when it's really crony capitalism.
Re:The old guard bribed these restrictions (Score:5, Interesting)
into place to protect their oligopoly. Some blame it on "socialism" when it's really crony capitalism.
The correct term is "regulatory capture". Private businesses use the power of the state to protect, subsidize or otherwise benefit them and harm competitors and potential competitors. It's extremely common and the more pervasive the regulation is, the more common it is. Red tape and government procedures benefit entrenched players who have built the institutional structures and knowledge to deal with them.
This isn't to say that all regulation is bad... but a lot of it is. There was never any consumer benefit to banning direct sales. All regulations should be thoroughly scrutinized for their effects on the market, direct and indirect.
Servicing your needs. (Score:2)
into place to protect their oligopoly. Some blame it on "socialism" when it's really crony capitalism.
New car sales is merely the convenient excuse that makes shipping and selling new inventory easier for automakers. But the reason the dealership exists, is service. Also known as the main reason we call them stealerships. Before COVID invented the MSRP+FU pricing model, dealerships made 90%+ of their profit from service. Not sales. Still holds true today.
Before society ignorantly cheers for the death knell of stealerships, try and remember what the cost is going to be when you’re forced to return
Re: (Score:2)
I wonder if any of those out of work experienced service personnel would like new jobs doing the same thing... Na they'd rather starve or join ICE.
The #1 reason service mechanics are quitting the trade altogether is due to the abuse they've endured working for a stealership.
The customer isn't the only one getting ripped off in that deal. Service personnel are already starving. They're not making out well when asked to do warranty work that only pays for 50 - 75% of the time it takes to do the job.
Re: (Score:2)
If you're looking for a new racket currently in process of getting enshrined into laws, 3d printing validation laws are being pushed in a few states already, where in order to sell a 3d
Was not expecting them to admit that (Score:5, Insightful)
>arguing it unfairly advantages startups
Way to say your dealers suck.
but they want the same dealers to be only repair p (Score:3)
but they want the same dealers to be only repair place.
Re: (Score:2)
but they want the same dealers to be only repair place.
Automakers are generally happy to sell training and service equipment to non-dealership shops. Parts can be a more complicated problem. They don't want to sell parts outside of dealership networks. However, if they successfully got rid of dealerships (and all automakers do all of the direct sales they can get away with, they would love to dispose of them) they either would step that up or develop their own service networks, or both. They would have to either open service chains or enable franchises, or I su
Re:Was not expecting them to admit that (Score:5, Informative)
>arguing it unfairly advantages startups
Way to say your dealers suck.
They had to say it that way, because the more accurate statement is that the dealership law unfairly advantages existing automakers. It's not about the dealerships being good or bad, it's about the fact that setting up a dealership network takes a lot of time and money and requiring it is a good way to keep new competition out.
Re: (Score:2)
They had to say it that way, because the more accurate statement is that the dealership law unfairly advantages existing automakers.
Even the entrenched automakers don't want dealerships to exist, they would all prefer to sell directly. They have better ways to keep down competition at the federal level. Dealerships just take a cut of what they could be keeping all of if they didn't exist.
Re: (Score:2)
They had to say it that way, because the more accurate statement is that the dealership law unfairly advantages existing automakers.
Even the entrenched automakers don't want dealerships to exist, they would all prefer to sell directly. They have better ways to keep down competition at the federal level. Dealerships just take a cut of what they could be keeping all of if they didn't exist.
That's a valid point, though right now while they're facing competition from startups the dealerships do provide them with a moat that they want to preserve. If/when the startup threat is gone, the automakers will go back to hating the dealerships.
I think people forget how everyone laughed at Tesla because everyone knew that starting a new car company in the United States was impossible. Now we also have Lucid and Rivian. Maybe someday Aptera will manage to get off the ground. This is a novel situatio
Re: (Score:1)
Maybe someday Aptera will manage to get off the ground.
With three wheels? No doubt they will, insert clip of Reliant Robins here :D
Another example of US archaism (Score:5, Interesting)
The US has fallen behind the rest of the developed world in so many aspects of life due to ossification of structures driven by regulatory capture and fragmentation. Dealerships have been nothing but pernicious for consumers for decades, keeping ICE sales higher than they'd otherwise be, keeping prices higher than they'd otherwise be, etc etc. The rest of the world looks on with incredulity that you find it so difficult to unfuck yourselves.
Expensive dealer recalls will test the old model (Score:2)
So how about BYD? (Score:2)
Re: (Score:1, Insightful)
> Swazticar corruption
Isn’t it amazing how the same folks painting Swastikas on Teslas ALSO paint them on synagogues, Jewish homes, and Jewish businesses?
Maybe, just maybe, you shouldn’t be so smug about that?
Nah. That’d require second order thinking.
And math is racist after all.
Re: (Score:1)
Isn’t it amazing how the same folks painting Swastikas on Teslas ALSO paint them on synagogues, Jewish homes, and Jewish businesses?
I see no evidence that it is the same people. I think it is in fact people on the opposite ends of the political spectrum.
Sigh (Score:5, Funny)
Only in America could you legally argue that an unnecessary profit-making middle-man was legally required and that it would somehow "reduce costs".
Re: (Score:2)
You don't understand this ads competition. Can you imagine what it would be like if Ford set the price of the cars themselves? /s
Consumers will get screwed (Score:1)
Everyone hates going to a dealer to buy a car.... (Score:2)
Valuable for who? (Score:1)
Dealers say independent franchises are vital to the car-buying process, creating competition between dealerships that keeps prices affordable for consumers, while providing valuable services such as repairs, warranty work and financing...
Honda dealers quoted me $1600 to replace a cracked windscreen, and I'd have to take it to them to leave it for a day. O'Brien Glass came to me and replaced it in my workplace's carpark for less the 1/4 the price. Dealers certainly aren't doing anything to keep prices affordable.
Service Issues (Score:2)
I bought a Tesla online in 2021 (after first test driving one). I loved the process and the car was delivered to my driveway. I hate car salesmen. I don't like haggling, this is what I want, dont bs the price. I should be paying the same as the next customer, just like as if I was buying a laptop from Costco. Here is the real gotcha - service. Tesla is essentially a monopoly with their service centers - which definitely are not great. All states should allow sales direct to customer. But they should also re
"Small business owners"? *cough* bullshit *cough* (Score:2)
Re: (Score:2)
True. The car dealership that sucked up all the other car dealerships in town is the highest sales tax generator in the city, ahead of Home Depot and all the other grocery stores. They have a lot of local political power and influence.
VW dealers (Score:2)
...are not independent in the EU, they sell ONLY VW vehicles, so one could say they are like employees.
affordable (Score:1)
independent franchises are vital to the car-buying process, creating competition between dealerships that keeps prices affordable for consumers
Exactly! Adding a middleman always lowers the price. Everyone knows that!