Illinois auto dealers lost a legal fight to stop Rivian and Lucid Motors from selling cars directly to consumers in the state.

A circuit court judge dismissed the lawsuit against the brands and the state that was brought by the Illinois Automobile Dealers Association, other trade groups and individual dealers.

Associate Judge David Atkins ruled that the Illinois secretary of state acted within the law in granting dealer licenses to the two electric vehicle startups in 2021.     

When filing the suit, IADA President Pete Sander said it was aimed at protecting “consumers as well as the hundreds of franchised dealers across the state who contribute to the local economy.” The association represents more than 700 car dealers across Illinois.

The lawsuit argued that only franchisees have the right under state law to sell new vehicles.

Dealers have fretted about the impact of direct sales along the Tesla business model because it cuts out their middle-man role in the car-buying process. Some states have barred direct vehicle sales, but Illinois is among those that allow them. 

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