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With the news cycle as accelerated it is, this little tidbit from last week escaped my attention until now: Michigan lawmakers are trying to forbid Rivian (and other EV makers) from direct sales in the state. This is an attempt to enshrine the franchise model further into law – aka requiring Rivian dealerships. It would create a huge barrier to entry and make any new mobility EV severely non-competitive. I looked into it. Yes indeed, the bill proposed to the legislature includes this text (unrelated portions elided for space):
Sec. 14. (1) Except as otherwise provided under section 17d, a manufacturer shall not do the following:
i) Sell any new motor vehicle directly to a retail customer other than through franchised dealers, unless the retail customer is a nonprofit organization or a federal, state, or local government or agency.
It’s not like Rivian is an international or even an out-of-state company. In fact, Plymouth, Michigan is their headquarters. This is pure big three protectionism, at it’s finest.
Why give consumers a choice of business model? The cash flowing from OEM coffers into lawmaker pockets can instead reinforce a business model customers don’t like or trust. Even though existing OEMs complain about the dealership model and the shackles it puts on their business, I guess Detroit embraces mandatory dealerships because it’s a huge barrier to entry for any other EV maker.
Let’s destroy Detroit’s place in the new mobility economy
What I find most frustrating about this proposed bill is how short sighted it is. Detroit has a historical place as the center of the auto industry. What Jason Sheppard and his colleagues in the Michigan chambers are doing is effectively guaranteeing Detroit will be relegated to the history books. Like any sane company, Rivian will just move elsewhere rather than create Rivian dealerships. They’ve already stated they have no intention of responding to this by creating a dealer network in Michigan. Instead, they’ll sell cars in Illinois, California, or Colorado – or any other state that doesn’t have restrictive franchise laws.
Rather than putting legislation in place to attract new mobility, Michigan would rather attempting to force Rivian and other EV makers into a non-competitive dealership model. That will all but ensure there is no incentive for existing Detroit automakers to adapt or change. And it will ward off any potential transformation of Michigan’s economy.
Detroit embraces mandatory dealerships because it’s a huge barrier to entry for any other EV maker.
I’m buying a Rivian
Before I learned about this bill, I planned to write a blog on why I was looking at a Rivian for my next truck. I’ve been a happy Ford truck owner for the last two decades – with two Rangers, and one F-150. But I’m leaving Ford because I don’t trust that they understand how mobility is changing.
I want an electric truck, but more than that – I want the “Tesla model” applied to trucks. (And I’m sorry Elon, but the Cybertruck is about as ugly as it gets.) From everything I see, I trust Rivian to do that. They are starting without preconceived notions of what a vehicle needs to be and how it needs to be built. They’re appealing to what I like about a truck – outdoor-savvy and loaded with tech.
Why an EV truck?
Ford seems puzzled about who wants an EV truck and why. They appear to predominately target rural ranchers and construction workers who, for obvious reasons, are attracted to the “brawn” of a truck. While I respect those professions, I am not one of them. I’m an information worker and technology enthusiast who loves canoeing and camping, who pulls a trailer, and who occasionally needs to haul wood, pick up some drywall, or move a neighbor’s furniture. As Ford goes full-steam-ahead on their EV F-150, it’ll be interesting to see who they end up targeting with those new vehicles. I’m going to guess that they’ll be too hesitant to turn away from their “tough guy” image that they’ve worked so hard to create.
Rivian appeals to me and my demographic much better. They are building the truck I want with flexible technology and modern software at the core of their design. RJ and crew are re-imagining the truck from the skateboard on up, leaving behind the shackles of traditional audience, design, sourcing, and production to deliver something new. Compare this to Ford, who really doesn’t “get” one of the key parts of new mobility vehicles: software. (That statement is not entirely true, but it’s short-hand for the problem; we deconstruct this core deficit of all of the OEMs in a lengthier, more nuanced way in our Autotech Revolution e-book.)
You know what really cements my feelings about who I’ll be getting my EV truck from? The fact that Rivian needs to fight off dealerships to sell their trucks in their home state.