Dealer Stories

IADA Challenges Direct-To-Consumer Ruling

Sometimes it seems like a disagreement stems from interpretations of a law… this one just seems to stem from a judge outright ignoring a law. Judges can’t do that, right? We thought it was illegal.
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IADA Challenges Direct-To-Consumer Ruling

A decision in December 2022 gave the luxury EV brand Lucid and Rivian permission to begin direct-to-consumer sales in Illinois.

The judge ruled based on a 2017 deal allowing Tesla to operate its dealer network, which was updated in 2019 to specifically say the brand could operate up to 13 dealerships within the state. Later in 2020, a state lawmaker said OEMs were under no obligation to set up a network of franchise dealers.

OK, so, zooming up to today. Illinois Auto Dealer Association executive director Joe McMahon says the Tesla deal and the IADA's approval was a one-time thing and should not be used to make ongoing decisions. He said the IADA's stance is that the law is clear; you cannot be a manufacturer and a dealer in the state.

In a filing in Chicago last Friday, the group states that the ruling violates the law and should be reversed.

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