Washington has adopted new legislation allowing electric vehicle manufacturers to sell directly to consumers in the state.
Under the prior law, most manufacturers could not sell directly to consumers due to the state’s long-standing rule requiring automakers to sell vehicles only through franchised dealerships.
Tesla, as the first major electric vehicle manufacturer, was granted an exception in 2014, allowing it to sell vehicles directly to buyers in Washington.
Senate Bill 6354 has now extended that direct-sales privilege to other EV manufacturers, such as Rivian and Lucid Motors.
The information was confirmed by the Marc Winterhoff-led company on LinkedIn this Wednesday.
“Yesterday our team, including SVP of Global Revenue Erwin Raphael, joined partners in Olympia to witness Governor Bob Ferguson sign into law legislation enabling Lucid to sell its award-winning vehicles directly to customers in Washington state,” the company said.
The new law “expands access to electric vehicles while providing the clarity needed for continued job creation and long‑term growth in the state,” the EV maker added.
Senate Bill 6354
Senate Bill 6354 resulted from private negotiations between the Washington State Auto Dealers Association and the firms.
Lawmakers passed the bill on March 12, after it was introduced on February 19 and voted out of the Senate Transportation Committee.
SB 6354 passed by margins of 47-2 in the Senate and 84-9 in the House — with Governor Bob Ferguson having signed the bill on March 24, 10 days before the deadline.
The bill limits direct sales to US-based companies that produce only battery electric vehicles (BEVs), operate at least one service facility in the state, and have never had a franchise agreement with a dealership.
The brands must have at least 300 vehicles registered in Washington as of January 1, 2026, signaling demand for their cars.
At the same time, the bill prohibits existing carmakers from using EV subsidiaries to sell directly to the public, protecting dealer contracts with legacy automakers.
Opposition
Despite historically opposing direct sales, the Washington State Dealers Association views the bill as the “result of joint good faith deliberations.”
It “provides the necessary safeguards to protect consumers and prevents manufacturers with franchisees from unfairly competing against their own dealers,” according to Executive VP Vicki Giles Fabre.
Automakers — excluded from negotiations — strongly oppose the legislation.
“We fundamentally believe all automakers should operate under the same set of rules,” said Curt Augustine, senior director for state affairs for the Alliance for Automotive Innovation.
According to Augustine, these EV manufacturers “could have dealerships and could be on the same side as the Washington state dealers.”
“To be clear, this special treatment didn’t end with Tesla, and it won’t end with Rivian and Lucid either,” he stated.
The representative warned that some of the largest EV manufacturers in the world are government-supported Chinese firms, which could be further encouraged to enter the US if bills like this one are approved.
Association leaders, however, preferred the bill’s limited scope — applying only to two companies— over a broader ballot battle that could allow direct sales for any EV maker, which could include China’s EV makers in the future.
Rivian and Lucid
Rivian operates four service centers in Washington — in Fife, Seattle, Bellevue and Bothell — with another one just on the other side of the border with Canada (in Richmond, British Colombia).
The company has a showroom in the University Village Shopping Center in Seattle, where Lucid also operates a studio.
The Newark, California-based premium EV maker operates a service center near the Seattle airport, and another one in Vancouver, about 150 miles from Seattle.
Before the new legislation, the companies were not allowed to sell vehicles through these locations.
Earlier this year, Rivian invested $4.6 million in a public initiative to overturn the direct sales ban through Washington Coalition for Consumer Choice and Innovation.
The group planned to submit a ballot measure on the issue in November, as “all Washington drivers should have the option to test drive and purchase the vehicle of their choice.”
However, as the Senate Bill advanced, the initiative was put on hold.
“We’re very pleased that the Legislature took action to ensure that Washington drivers have the option to test drive and purchase the vehicle of their choice,” Mark Funk, a spokesman for the coalition said in a statement earlier this month.
He added then that the group wants Governor Bob Ferguson to sign the bill “as soon as possible, making these important consumer benefits law and eliminating the need for a ballot measure campaign.”
Other US States
The move adds Washington to a growing list of states that have carved out exceptions for pure EV makers, though the broader legal landscape remains deeply fragmented.
All 50 US states require that all new vehicles be sold through independently franchised dealerships.
The laws date back to the 1930s and were designed to protect dealers from being undercut by the manufacturers they represented.
Of these, at least 17 states expressly ban direct sales, with Texas, Louisiana, and New Mexico maintain outright prohibitions with no exceptions.
Alabama classifies manufacturer-owned stores as unfair and deceptive trade practices.
Arkansas bans both direct sales and direct leasing. Oklahoma and Wisconsin similarly block manufacturers from selling to the public.
South Carolina’s restrictions go further, prohibiting manufacturers from even servicing vehicles within the state — a provision that has blocked companies, including Tesla, from doing business there.
A bipartisan bill introduced in the state’s legislature to ease those restrictions failed to advance in 2025.
Mississippi moved to tighten its restrictions in 2023, when legislation was passed banning direct EV sales by manufacturers.
Tesla‘s existing location was “grandfathered” in — the company was granted an exception to the ban since the store existed before the law was signed.
Around nine states occupy a middle ground, allowing limited direct sales exclusively by manufacturers that were already operating in the state before a cutoff date — effectively granting Tesla-only exceptions while locking out newer entrants.
Ohio, for instance, allows Tesla to run three stores under a 2014 deal but blocks all other manufacturers.
Rivian sued the Ohio Bureau of Motor Vehicles in August 2025, arguing that the state’s Tesla-only exemption is anti-consumer.
States Opening the Door
At least 18 states have passed laws allowing some form of direct-to-consumer sales, though most come with conditions.
Some, like Utah, restrict the model to manufacturers that exclusively sell zero-emission vehicles.
Others, including Georgia and North Carolina, cap the number of stores a manufacturer can operate.
Illinois granted dealer licenses to both Rivian and Lucid following a 2022 court ruling.
Colorado became the first state to formally approve Scout Motors‘ direct-sales application in late 2025, after the state’s Motor Vehicle Dealer Board ruled that Scout is not the same-line manufacturer as Volkswagen.
The VW Group is facing scrutiny in several states over its EV subsidiary in the US.
In both California and Florida, other VW Group brands and dealer associations have been arguing that its direct‑sales approach violates state franchise laws.
Legal Landscape Remains Volatile
The legal environment is shifting rapidly in both directions.
The US Department of Justice’s Antitrust Division launched a task force exactly a year ago to examine whether state franchise laws discourage free-market competition.
The Federal Trade Commission has long advocated for allowing direct sales, and a Goldman Sachs analysis previously estimated that eliminating the dealer intermediary could save consumers over $2,000 per vehicle.
On the other side, however, New York lawmakers have proposed stripping Tesla of its “grandfathered” sales permits by mid-2026.
Late last year, the Elon Musk-led company sued North Dakota’s Department of Transportation after it had rejected its applications to open direct-to-consumer showrooms in the state.
Tesla settled its lawsuit against Louisiana in mid-2025, accepting the state’s ban rather than continuing to litigate.
California’s state dealer association has previously sued Sony Honda Mobility over plans to sell its Afeela sedan directly to consumers.
Earlier this Wednesday, the joint development of the two models abruptly ended, just weeks after the Japanese automaker reported a $15.7 billion write-down on its EV strategy shift.
