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Rivian, Lucid and other EVs stuck in park by failed effort to change car sales laws in Washington

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A Lucid Air Grand Touring electric vehicle inside the company’s studio space at University Village in Seattle. (GeekWire File Photo / Kurt Schlosser)

If you own one of the 3,853 Rivians registered in Washington, odds are you didn’t test drive the electric vehicle in the state. That’s because the law bars Rivian from selling directly to consumers, and the company isn’t working with franchised dealerships.

And, at least in the near future, that situation is unlikely to change.

The latest effort to revise the law has again stalled in the state’s capital, sunk by opposition from auto dealerships.

A coalition of EV companies and environmental groups were pushing for an update that would permit direct sales for all EV manufacturers — an allowance that lawmakers granted exclusively to Tesla a decade ago. The law exists to prevent manufacturers from competing against franchised dealerships.

Oregon, California, Idaho, Arizona, Nevada and most other Western states allow all EV manufacturers to offer direct sales. Washington, Montana and New Mexico don’t, leaving consumers to buy the EVs online and get them delivered, or traveling out of state to make the purchase.

Expanding direct sales “could move the needle in accelerating EV adoption, particularly in the near term, which is something that we just have to do to hit our goals here in Washington state,” said Leah Missik, senior Washington policy manager for the nonprofit Climate Solutions.

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More than a year ago, Washington joined California and others in requiring all new vehicles sold in the state to be zero carbon emissions by 2035. That includes passenger cars, light-duty vehicles, and medium-duty vehicles such as larger pick-up trucks and SUVs.

Over the past two years alone, the number of all-electric and plug-in hybrid vehicles has more than doubled in Washington to more than 173,000 registered vehicles in the state.

Rivian has a space at Seattle’s University Village where shoppers can look at, sit in — but not drive — its electric vehicles due to a law barring direct sales by manufacturers for all cars except Teslas. (GeekWire Photo / Brent Roraback)

EV market leader Tesla has more than 77,800 vehicles registered in Washington. Nissan is in second, with 14,000 EVs in the state, followed by Chevrolet with 13,500 electric and plug-in hybrid vehicles. Nissan and Chevy sell their cars through dealerships.

A proposed bill in this year’s Washington state legislature known as SB 6304 covered a variety of EV-related policy issues, including the expansion of direct sales. Lawmakers passed the bill out of the Senate’s Transportation Committee — but only after cutting the controversial direct sales provision. The measure is likely dead for this session.

A similar effort three years ago to increase EV direct sales also failed. Franchised dealerships have vigorously fought the measures.

For now, Rivian has a “space” at Seattle’s University Village shopping center and Lucid has a “studio” at the upscale outdoor mall. Shoppers can get inside parked cars and learn about the vehicles.

But unlike a Tesla showroom — including one that’s located at the same mall — Rivian and Lucid cannot give shoppers a test drive, sell them a car, or discuss financing for purchases.

“Franchise dealerships are really experienced at getting everyone into vehicles, regardless of your income, regardless of your credit history.”

– Matthew Phillips, CEO of Car Pros Automotive Group

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Paula Sardinas, CEO and president of Washington Build Back Black Alliance, previously served as co-chair of the state’s EV Coordinating Council. She wants to see increased EV adoption for its health and environmental benefits. Her alliance strongly supports direct sales legislation to open up the EV marketplace.

“In God we trust — everybody else I’ve got to test drive,” Sardinas quipped.

She asserted that consumers have a better experience buying from the car manufacturer, saying auto dealers sometimes pressure shoppers into purchasing extended warranties and other costly, unnecessary protections.

Matthew Phillips, CEO of Car Pros Automotive Group, which owns nine dealerships in Washington and California, rejected those claims.

“Franchise dealerships are really experienced at getting everyone into vehicles, regardless of your income, regardless of your credit history,” Phillips said.

Phillips said manufacturers’ stores are more likely to be found only in urban settings and in fewer locations, offer limited access to repairs and recall fixes, and lack the competition that exists between auto dealerships.

EV makers Fisker and VinFast have opted into the traditional dealership route, he said — which remains available to Rivian, Lucid and others.

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The Tesla showroom at University Village in Seattle. (GeekWire Photo / Lisa Stiffler)

“Franchise dealers are best for everyone involved — consumers, employees and communities,” he said. “The only people it’s not best for are tech billionaires and hedge funds.”

But the groups pushing for direct sales question whether dealerships are truly interested in EV sales. They point to two letters signed by franchise dealers across the U.S. and in Washington that were sent to President Biden, calling on him to back off on his EV sales mandates.

Phillips noted that neither the national or the Washington auto dealers associations signed the letters, adding it was a “myth” that dealerships don’t want to sell EVs.

Direct sales supporters say they aren’t giving up.

“We will continue to work alongside a wide range of leaders and groups — representing priorities like consumer rights, equity and fairness, job creation and business investment, market competition, environmental stewardship, and more — to enact this commonsense law as soon as possible,” said Hannah Steinweg, Rivian’s public policy manager, via email.

Source: Geek Wire

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