Rivian and Lucid can operate like Tesla after new legislative win

31 Mar 2026, 00:17 · The Fresno Bee

Tesla has always occupied a special place in the U.S. automotive landscape as one of the few original equipment manufacturers that does not have to adhere to state dealership franchise laws that have been in place for decades, but now rivals EV Rivian and Lucid are getting the same treatment in at least one state.

The traditional dealership model forces consumers to visit showrooms where a third party acts as a middleman in the sale of the vehicle to them.

"By bypassing the dealership, Tesla offers customers a more transparent buying experience with set prices and minimal negotiations," according to experts at Jupiter Chevrolet. "The company has turned its online platform into a one-stop shop where consumers can browse models, configure their vehicles, and make purchases, all from the comfort of their home."

Car dealerships started convincing states to enact franchise laws in the 1930s, according to The Week. But from the 30s to the 50s, as laws were put on the books, GM, Chrysler, and Ford came to dominate sales while dealerships remained more like mom-and-pop operations.

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So the auto dealerships, through the National Automobile Dealer Association (NADA), successfully began lobbying to force OEMs into the dealership model. Since then, dealerships have grown from mom and pop to the top 10 dealership groups having combined annual revenues around $10 billion, "more than any car company," Daniel Crane wrote at the Cato Institute in 2021.

But Tesla has enjoyed its direct-to-consumer exemption since entering the market in 2013, and it has used lobbying and lawsuits against states to force them to change their dealership laws.

Tesla testified to the Federal Trade Commission that its status as an EV OEM meant it could not successfully use the dealership model. In 2014, NADA "launched a state-by-state battle" to protect its interests, to varying degrees of success.

Today, about half of the states have eased their restrictions on direct EV sales, according to Cato. In contrast, others like Alabama, Arkansas, Connecticut, Iowa, Kansas, Louisiana, and others maintain direct sales bans.

Earlier this month, Washington state passed a bill that will allow Tesla rivals Rivian and Lucid to enjoy the same advantages Tesla does in the state and sell vehicles directly to consumers.

Photo by Bloomberg on Getty Images

Washington state passes bill allowing Rivian and Lucid to sell directly to consumers

Washington Governor Bob Ferguson has until April 4 to sign Senate Bill 6354 into law, granting EV OEMs the right to sell cars directly to consumers, circumventing the dealership model.

The bill had overwhelming bipartisan support, with the state House voting 84 to 9 in favor, and the Senate voting 47 to 2 the same way. Now, companies like Rivian and Lucid, and any future company meeting the criteria, can enjoy the same narrow exemption Tesla has operated under in the state since 2014.

Tesla has been the only EV maker permitted to sell directly in the state this whole time. Now, the company will have a bit more competition, and according to reports, Rivian used a different lobbying playbook than Tesla did.

"Previous direct sales victories came through slow legislative advocacy or executive action, according to Good Car Bad Car. "Rivian's approach weaponized direct democracy, forcing an outcome that years of traditional lobbying had failed to deliver."

Rivian reportedly spent $4.6 million to file the ballot initiative, which is a governor's signature away from becoming law in the state. The initiative garnered enough signatures to qualify for the November ballot.

"Rivian's $4.6 million essentially bought a seat at the negotiating table that no amount of traditional lobbying could have secured," Good Car Bad Car said. "The playbook is replicable in any state with a citizen initiative process, and Rivian has signaled it is willing to use the same approach elsewhere as R2 deliveries ramp later this year."

This is a serious challenge to dealerships' market dominance, but a great sign for Rivian (and Lucid) as it looks to become a viable alternative for EV fans who don't want to buy a Tesla.

JPMorgan analysts back Rivian deal with Uber

On March 19, Rivian and Uber announced a partnership in which Uber will invest up to $1.25 billion in Rivian and deploy as many as 50,000 autonomous R2 vehicles on its ride-hailing platform.

The vehicle's autonomous rides are expected to launch in San Francisco and Miami in 2028, with plans to expand to as many as 25 cities across North America and Europe by 2031. If everything goes to plan, the deal also gives the companies the option to negotiate the purchase of up to 40,000 more autonomous Rivian R2s beginning in 2030.

JPMorgan analysts gave their seal of approval to Uber's $1.25 billion investment in Rivian, saying that the deal to supply the ride-hailing company with tens of thousands of autonomous vehicles in two years was promising.

While the firm maintained its "underweight" rating and $9 price target on Tesla's main domestic rival, it says the deal helps alleviate some of Rivian's excessive cash burn, as the electric vehicle maker continues to report "persistently large" operating losses and free cash outflows.

That extra cash will come in handy as Rivian navigates what analysts describe as a "seemingly increasingly structurally unprofitable" EV market, according to TipRanks.

In the fourth quarter, Rivian reported an adjusted loss of 54 cents per share on revenue of $1.29 billion. For the first time in 2025, Rivian closed out the full year with an annual gross profit of $144 million, thanks to an 8% increase in revenue to about $5.4 billion.

But much of that profit came from Rivian's software and services segment, as its automotive business lost $432 million last year.

So increasing the physical presence of its vehicles on the road is paramount for the company, and its legislative victory in Washington could help pave the way for that growth.

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This story was originally published March 30, 2026 at 5:17 PM.