Lucid Group Petitioned for En Banc Review in Texas
The EV manufacturer is challenging a court ruling that upholds state laws banning direct-to-consumer vehicle sales.
Updated on Sept. 22, 2026 in Buying/Selling
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Lucid Group has filed a petition for en banc review with the U.S. Court of Appeals for the Fifth Circuit. The move follows the court's earlier decision to affirm summary judgment for Texas officials, who successfully defended the state's ban on manufacturer-owned dealerships.
Why it matters
The case centers on whether Texas can restrict vertical integration in the auto market, a policy that effectively prevents automakers from operating their own retail locations. The petition asks the full court to reconsider whether these restrictions constitute improper economic protectionism.
Texas Occupations Code Section 2301.476 serves as the basis for the dealership ownership ban. The appellate panel relied on over 20 years of legal precedent regarding the state's authority to regulate retail market structures.
The players
Lucid Group
This American electric vehicle manufacturer specializes in luxury high-performance cars and has sought to expand its direct-sales model across several U.S. states.
Texas Department of Motor Vehicles
This state agency is responsible for licensing motor vehicle dealers and enforcing the state laws that govern how vehicles are sold to the public.
U.S. Court of Appeals for the Fifth Circuit
This federal court holds jurisdiction over cases from Texas, Louisiana, and Mississippi and is currently the venue for the high-stakes dispute over dealership sales laws.
The details
Lucid initiated legal action after the Texas Department of Motor Vehicles blocked the company from selling vehicles at its Plano studio in 2021. While the district court initially granted summary judgment in favor of state defendants in 2025, Lucid continues to argue against the constitutionality of the dealership control ban.
Timeline
The Texas DMV notified Lucid in 2021 that it could not sell vehicles at its Plano studio.
Lucid filed its initial lawsuit against Texas DMV officials in November 2022.
A district court granted summary judgment to state defendants on March 31, 2025.
The Fifth Circuit affirmed the summary judgment decision on September 4, 2026.
Lucid filed its petition for en banc review on September 18, 2026.
Roadmap
This case highlights the ongoing friction between emerging EV manufacturers using direct-sales models and established franchise laws meant to protect traditional dealerships. The legal outcome in Texas sets a significant marker for how states can balance vertical integration against existing retail regulations.
Current residents in Texas remain unable to purchase vehicles directly from manufacturer-owned studios, such as those operated by Lucid. The ongoing litigation ensures that the current retail structure for new cars will persist at least until the appellate process is fully exhausted.
The takeaway
The case emphasizes the legal hurdles electric vehicle brands face when attempting to bypass the traditional dealership network in specific jurisdictions. Consumers in restrictive states may continue to face limited options for purchasing vehicles directly from manufacturers while these legal battles proceed.
Further reading
For more on market regulations, explore the Buying/Selling section.
Source note: This article includes information reported by The National Law Review - A Free To Use Nationwide Database of Legal Publications.
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