Lucid Motors Sues Texas Over Direct-To-Consumer Sales

Nov. 07, 2022 6:30 PM ET by Chase Bierenkoven Industry News / 8 Comments

Lucid wants Texas to become part of a growing number of states, like Colorado, that allow direct-to-consumer sales.

The makers of the Lucid Air are back in court.

Previously, Tesla went up against the state of Louisiana to battle its direct sales legislation. Tesla's various battles against states also benefited other EV companies like Lucid and Rivian, who don't sell cars via the traditional dealer model.

In its Western District of Texas, Austin Division, filings, the brand calls Texas' rules on dealerships "economic protectionism," per Automotive News. Smaller electric-only automakers are fighting for the right to sell directly to their consumers across the US, with some losses, as Lucid saw in Louisiana, and some wins, as Rivian has seen in Colorado.

Colorado is now home to a massive Rivian hub, and Rivian's vehicles are rapidly becoming commonplace in the city's wealthier areas, like the Cherry Creek suburb and capital of Denver.

In Colorado, Lucid hopes to do the same, having opened one of its Studios in the Cherry Creek Mall. Tesla also has showrooms in malls in the Denver metro area.

This is thanks to legislation passed by Denver in 2020- Senate Bill 20-167. The bill allows a new exception that lets manufacturers like Rivian, Lucid, and Tesla sell their cars in-state, but only if the automaker solely produces EVs with no franchised dealers.

In Texas, Lucid is no doubt desiring a similar outcome.

Lucid says the state of Texas is forcing companies to sell through dealers.

It says there's a better way and that its Studios focus on the customer experience and not on pushing cars off a lot. In its filings, uncovered by Automotive News, Lucid says, "that tight and fast feedback loop, and the benefits it brings to Lucid's customers, would be impossible with third-party dealers interposed between Lucid and consumers."

In the filings, Lucid states that "reducing competition only hurts Texas consumers." It says this is to existing dealers' benefit and that current legislation puts dealer profits ahead of the interests of Texan buyers.

For the legal laypersons, we and AN reference Lucid's arguments to the Texan courts in writing. The document establishes Lucid's argument as to why it should be able to sell cars direct to consumers in Texas, who the involved parties are, and how Lucid's direct sales model works, among other legal necessities.

Lucid also says it has a strong case for doing business in Texas. It claims residents have shown genuine interest in the Air sedan "through vehicle reservations and orders, inquiries to Lucid, and visits to Lucid's website."

Lucid wants to open a Studio in Plano, Texas this year and other Studios on top of its Houston service and delivery center.