Lucid (LCID) files lawsuit against Texas over direct sales ban

Lucid Motors (NASDAQ: LCID), an American electric vehicle maker headquartered in California, has filed a lawsuit against the state of Texas over the state's rules on auto dealerships, which the EV startup labels "economic protectionism."

In a suit filed in Austin, Lucid said the state is acting anti-competitively in forcing companies to sell their products through established dealerships. Lucid argues that its direct sales and in-house after-sales service are so intertwined that using an independent franchised dealer would not be economically viable and would harm the 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," according to the plaintiff's statement

Lucid is testing out a similar legal strategy to one tried largely successfully by Tesla Inc. in Michigan. After more than three years of litigation, the parties settled, and Michigan consumers can now buy Tesla vehicles and get them serviced there. Texas-based Tesla (NASDAQ: TSLA) faces similar challenges and is unable to sell directly to Texans.

Shares of LCID are down 1.04% near end of day trading on Monday.

By Michael Elkins | [email protected]

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