Business

Did law that protects car dealers keep NC from landing a 10,000-job car factory?

North Carolina had conversations with Rivian about opening a plant here.
North Carolina had conversations with Rivian about opening a plant here. Associated Press

Rivian, an electric-vehicle maker with the backing of both Amazon and Ford, held conversations last year with North Carolina recruiters about building a manufacturing plant in the state with the potential of employing more than 10,000 employees.

But the conversations apparently never progressed, in part because of the state’s ban on direct-car sales, which would bar Rivian’s ability to sell and service cars throughout North Carolina without a dealership network, according to records released to The News & Observer.

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Ultimately, Rivian selected Georgia for its manufacturing expansion — announcing in December it would build a $5 billion plant with up to 7,500 jobs outside of Atlanta.

Georgia is currently considering a bill, introduced after Rivian selected the state, that would allow Rivian and other electric-vehicle makers to offer direct sales.

Many states limit the ability of carmakers to sell directly to consumers, pushing them instead to go through auto-dealership networks that have existed for decades.

North Carolina’s laws apparently presented a large stumbling block for landing the Rivian plant, according to the records, which the N&O obtained through a state public records request. And the state’s conversations with Rivian never reached advanced stages.

In an email sent to the office of Gov. Roy Cooper last August, the Economic Development Partnership of North Carolina, which handles recruitment for the state, said Rivian was not a fan of the state’s current climate around direct sales.

“As you know, the foundation of our business model is direct-to-customer sales and service,” a Rivian representative wrote to the EDPNC. “Unfortunately, North Carolina’s law as it currently stands would prohibit us from being able to do that. This issue alone is making it very hard for us to dive deeper.”

Tesla partially exempt from law

In North Carolina, a law passed in 2019 granted Tesla an exemption, allowing it to have six direct sales and servicing centers in the state.

But, as state recruiters noted, North Carolina is one of four states that ban not only direct sales but direct car servicing as well.

These laws are designed often to protect locally owned car dealerships, the N&O previously reported.

Records show that state Rep. Julie von Haefen, a Wake County Democrat, planned to introduce a bill that would relax North Carolina’s direct-car sales laws, but the effort never made it through the N.C. General Assembly.

Von Haefen was not immediately available for comment.

Surge in selling electric vehicles?

Last year, Tesla, Rivian and another electric-vehicle manufacturer, Lucid Motors, lobbied state governments across the country to change their direct sales laws, Techcrunch previously reported.

North Carolina recruitment officials were eager to woo Rivian, setting up several phone calls and meetings with the company’s representatives.

Rivian is considered one of the most promising electric-vehicle startups to emerge in recent years. The company went public on the Nasdaq stock exchange last year, and it has signed a contract with Amazon to build electric vans for the e-commerce giant.

Conversations between the state and Rivian began in December 2020, records show, and continued until last summer, before the company’s interests apparently went elsewhere. The state referred to its recruitment of Rivian as “Project Tera.”

North Carolina listed several large sites that could have accommodated Rivian’s plans, including Triangle Innovation Point near Moncure and the Siler City megasite in Chatham, Cabarrus and Randolph counties.

While the Chatham County megasites still haven’t landed a large tenant, the Randolph County megasite was selected by Toyota for a battery plant last year, and Cabarrus County recently landed a $1 billion investment from pharmaceutical company Eli Lilly.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate

This story was originally published March 7, 2022 10:51 AM.

Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.

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