With the threat of a ballot initiative looming, a slate of auto dealers in Washington have come out in support of EV makers Rivian and Lucid Motors in their pursuit of direct sales to consumers.
Electric automakers have fought for years to change the state law that only allows Tesla to directly sell cars, operate showrooms and offer test drives to potential customers in Washington. The rule exists to prevent manufacturers from competing against franchised dealerships.
In December, Rivian began taking steps to put the issue before voters this fall — an action that could exclude dealers from having a say in how the new rules are drafted.
On Friday afternoon, the Senate Committee on Transportation will consider Senate Bill 6354, which carves out a narrow exemption that applies to Rivian and Lucid, but excludes smaller EV makers and any new entrants to the market.
Multiple local dealership owners testified on Tuesday in favor of the recently introduced measure — but they also offered caveats and concerns.
“I believe that SB 6354 provides a fair compromise and gives legal status to non-franchise EV manufacturers while keeping the guardrails in place to prevent abuse by our franchise manufacturers,” said Greg Rairdon, whose family owns 13 franchise dealerships in Western Washington.
He warned that further opening of direct sales to automakers would give manufacturers an insurmountable competitive advantage and force his and similar businesses to close up shop.
Oregon, California, Idaho, Arizona, Nevada and most other Western states allow all EV manufacturers to offer direct sales. Because Rivian and Lucid don’t offer their vehicles through traditional dealers, consumers have needed to make their purchases online and get them delivered, or travel out of state to shop.
Abigail Ramsden, western state policy manager for Rivian, gave an enthusiastic endorsement of the bill.
The legislation ensures “we can provide seamless customer service,” she said. “Rivian welcomes the opportunity to operate within a clear regulatory framework.”
Two years ago, EV auto companies and environmental groups pushed hard for legislation opening up direct sales. After that failed, Rivian launched a campaign dubbed the Washington Coalition for Consumer Choice and Innovation to put the issue to voters through a fall ballot initiative.
Rivian pledged nearly $4.7 million for the effort, and has spent $270,000, according to state records. The organization has not filed proposed language for an initiative. It would need to collect and submit at least 308,911 voter signatures by early July to be included on the November ballot.
If SB 6354 passes, those actions won’t be necessary. But not all dealers and automakers back the move.
“If the Legislature really believes that the franchise model provides benefits to communities, then why would the state ever entertain any concept like this that would create the erosion of those benefits by exempting some companies,” said Curt Augustine, senior director of state affairs of the Alliance for Automotive Innovation, in testimony this week.
Augustine also expressed his frustration in having the bill sprung upon him unannounced and without the opportunity to engage in negotiations. Craig Orlan, a government affairs director for the American Honda Motor Company, likewise shared his opposition.
“I’m disappointed to see several dealers supporting this legislation, which signals a slow erosion of a franchise system that has proven to be beneficial for manufacturers, dealers and consumers,” Orlan said. “In addition to those benefits, this model has also proven to be highly effective at selling and servicing electric vehicles.”
Beyond allowing the two EV makers to join Tesla in selling their vehicles directly to consumers, SB 6354 would:
- Increase the vehicle dealer documentary service fee from $200 to $250 until Dec. 31, 2036.
- Of the $50 increase, 25% would be allocated to the Electric Vehicle Account for instant rebates granted to low income households and 75% would be deposited in the Multimodal Transportation Account, which helps fund public transit, bike and pedestrian infrastructure and other travel.
SB 6354 has missed legislative cutoffs that apply to most bills, but because it includes a fee related to state funds it’s considered necessary to implement the budget and is exempt from most deadlines.
The legislative session is scheduled to end on March 12.
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