Lucid Sues Texas Claiming Dealer Rules Are Too Restrictive

Tim Healey
by Tim Healey
lucid sues texas claiming dealer rules are too restrictive

Electric-vehicle startup Lucid has sued the state of Texas, saying that the rules around selling cars in the Lone Star state are so restrictive they amount to "economic protectionism."

Lucid filed the suit in Austin. The suit claims that since Texas requires it to sell cars through established dealerships, the state is behaving in an anti-competitive manner. Further, Lucid said that since its direct sales business and service component are so closely linked, having to use independent franchised dealers would hurt its business.

“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,” Lucid said in the lawsuit.

Lucid is working to expand, and struggling a bit, having delivered only 1,398 of its Air luxury sedans in the third quarter, despite taking a claimed more than 37,000 reservations in the prior quarter. A cheaper Air Pure EV is on the way, presumably to allow more consumers to be able to afford one of Lucid's offerings.

Lucid isn't the first EV startup to try to bring a direct-sales model to Texas -- Tesla, which has also tried, and so far failed, to do so. Moving its HQ to Austin hasn't seemed to help. On the other hand, Tesla did succeed in Michigan, after three years of litigation.

The discussion/debate about direct-sales models vs. a franchised dealership model has been ongoing for a long time now. We'll see if Lucid can do in Texas what Tesla hasn't so far.

[Image: Lucid]

Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by  subscribing to our newsletter.

Join the conversation
  • ToolGuy ToolGuy on Nov 07, 2022

    It's like a whole other country.

  • Cprescott Cprescott on Nov 07, 2022

    I'm so glad I bought my current vehicle when I did. This might be the last one I buy. I don't like how the dance is conducted now - "take it or leave it". And to think idiot dealers are putting market adjustments on most vehicles - something the Japanese dealers were doing as far back as the 1970's.

  • Vulpine Vulpine on Nov 08, 2022

    Lucid has an advantage, IIRC... something about Saudi Arabian backing, I believe? I is that another brand.