For years, customers have griped about how unpleasant buying a car from a dealership can be. Often the second biggest purchase most people make in their lives, a car represents a major financial commitment. However, according to a wide variety of testimonies, going to a car dealership can completely deflate the whole experience. Unfortunately, most states require automakers to sell their vehicles through franchised car dealerships, a model that the nascent electric vehicle (“EV”) industry is looking to ditch forever.
Tesla was the first EV startup to completely bypass car dealerships and sell directly to the consumers. The company’s online sales model was praised by consumers who were grateful for the expedited buying process and that they didn’t have to deal with a salesperson. With fellow EV makers such as Rivian and Lucid now looking to copy the direct-to-customer sales model, several dealerships in Illinois have finally pushed back. According to the general manager for the Chicago-based McGrath City Hyundai and McGrath Evanston Subaru in Skokie Jeremy Gleason, the trend is “concerning.”
Like Tesla, Lucid and Rivian are looking to edge out independent dealerships in favor of online sales and manufacturer-operated showrooms, a move that has been opposed by a variety of dealership associations in Illinois. The Chicago Automobile Trade Association, the Illinois Automobile Dealers Association, the Illinois Motorcycle Dealers Association, the Peoria Metro New Car Dealers Association, and several other organizations have filed a lawsuit against Rivian and Lucid, naming the Secretary of State’s office as a defendant for not enforcing the Illinois Motor Vehicle Franchise Act.
This state legislation forbids auto manufacturers from selling their vehicles directly to consumers. According to the records, 250 out of the 700 dealerships in Illinois have filed the suit. Anthony Scala, who owns City Volkswagen, says manufacturers aren’t in the business of selling or servicing vehicles but rather in the business of making them. Were the current system of independent, franchised dealerships to collapse, the sector would descend into “absolute chaos,” he says, adding that dealerships exist to take care of customers.
Although Volkswagen has developed an electric vehicle that Scala calls a “game changer,” he is not too worried about manufacturers cutting out franchised dealers and dealing with their customers directly. President of the Chicago Automobile Trade Association Dave Sloan concurs with Scala’s statement about dealerships being there for the customers. Without independent dealers, Sloan is worried that there will be no price competition within the same brand.
The EV industry is truly disrupting the traditional automotive industry, and with new players such as ev Transportation Services Inc. selling fully electric vehicles to different market segments, one can understand the jitters being felt by players in the traditional automotive sector.
NOTE TO INVESTORS: The latest news and updates relating to ev Transportation Services Inc. are available in the company’s newsroom at https://ibn.fm/EVTS
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