here we go again.
Just as Volkswagen’s U.S. dealers are preparing to fight Scout Motors’ plan to sell cars directly to consumers, Honda’s U.S. dealer network is already combining forces to fight Sony Honda Mobility’s plans to do the same. But the fact that these fights happened at all speaks volumes about the uncertain future of the entire vending system.
At CES 2025, the joint venture between the two Japanese consumer tech giants announced that it also wants to use a Tesla and Rivian-style direct-to-consumer model to sell its upcoming Afeela electric vehicles, rather than the traditional franchised dealer model.
“We are taking a direct-to-consumer approach to simplify the customer experience and enhance customer satisfaction,” Shogo Yamaguchi, CEO of Sony Honda Mobility of America, told reporters at the technology trade show last week. “All operations from booking to sales are carried out through our website.” Yamaguchi added that making online reservations for Afeela 1 would serve as a “hassle-free bridge,” which may say a lot, intentionally or otherwise, about how the joint venture views the agency system.
Naturally, car dealers in America do not waste any time in responding.
In a statement published earlier this week, the National Automobile Dealers Association (NADA), the largest trade and lobbying group for dealers, said, “Not so fast.”
“Unfortunately, we are not surprised but remain very disappointed by Sony Honda Mobility’s announced plans to sell its vehicles directly to consumers and compete with the Honda and Acura dealer network,” said Mike Stanton, NADA President and CEO. Any attempt to bypass or undermine its American dealers will be challenged in state and federal courts across the country – with the full support of NADA.
Photo by: InsideEVs
Stanton added in his statement that NADA officials want to meet with Sony Honda Mobility executives to try to avoid “unnecessary and lengthy state-by-state legal challenges,” which similarly speaks to how dealers view any incursion into the franchise model — especially when so-called automakers step in. “Traditionalists.”
On the face of it, this might seem like just another dispute between America’s dealers and two car companies: first Volkswagen, now Honda. But on a deeper level, recent developments in the electric vehicle industry are increasingly creating cracks in this country’s once solid sales model.
It looks like this: When it comes to new car sales, most countries have a mix of franchised dealerships and private stores owned directly by automakers. This is not generally the case in the United States. For many decades, dealerships have formed a powerful political lobby that has enshrined into law requirements that new cars be sold only through their franchises — not directly from the auto companies themselves.
Dealers have long argued that as independent franchisees, they are best placed to protect consumers from unfair prices, offer repairs and customize their offerings to suit the needs of different regions. But the first company to deal a real blow to this system was Tesla, which even early on believed that dealers would not be enthusiastic about selling electric cars and would prefer to sell cars directly and online.
In fact, in the years since the advent of modern electric cars, many dealers have been accused of not educating their sales staff about electric cars or steering customers to gas-powered cars instead; Dealers have also emerged as a vocal lobbying force against stricter fuel economy rules aimed at boosting electric vehicle sales.
The “dealer problem” is something that many car company executives are privately aware of, but cannot speak out against directly, because they fear conflicting with the sales networks they legally rely on. But new entrants like Tesla, Rivian and Lucid have found ways to sell directly to consumers, though their ability to do so often varies from state to state.
But traditional car companies now want to be more like EV startups in different ways. This means selling directly and online. In the case of Scout Motors, executives told InsideEVs last year that the sale directly allows full control of “the most important points of our operations, which are reservations, demonstration rides, transactions, financing, and warranty service.” And they didn’t hold back when asked about the frustrations they’ve encountered with current electric vehicle sales and dealers.
“What we need from our front-line retail employees is full engagement, full enthusiasm and full dedication to driving sales,” Cody Thacker, vice president of growth at Scout Motors, told us in October. “Now, if you look at what’s happening in the industry, it’s very different from that.”
Photography: Scout Motors
But current Volkswagen and Audi dealer associations in the United States — who are particularly angry because they have demanded more powerful SUVs and trucks from the German automaker for years — immediately responded with legal action and indicated they were willing to do so under government law. -State level. However, at CES 2025, both Thacker and Scout Motors CEO Scott Keogh told InsideEVs that they don’t believe dealers’ claims have any legal merit, and that they are confident they will prevail in court.
Interestingly, the Afila project seems to be in the same situation.
While the Afeela 1 will be built in Ohio at Honda’s upcoming new EV hub — and will presumably share components with Honda’s next-generation EV, the 0 Series — Sony is very much in the driver’s seat on this project. It certainly has no relation to or like the current network of car dealers in America.
While Honda and Acura dealers may be upset about that, if Scout Motors wins the right to sell outright, it’s very likely that Afeela will be able to do so as well.
Photo by: Honda
Honda 0 Series Driving Saloon
(However, the Honda 0 Series probably won’t be so lucky. While the automaker didn’t mention sales plans at CES, these electric cars will presumably be sold through brick-and-mortar dealers like any other Honda. But how is Honda planning? So whether getting its dealers willing to sell a high-tech AI smartphone on wheels is anyone’s guess.)
However, this news represents a fascinating development in the story of dealer resistance to selling electric cars (and selling any type of car online): It’s no longer just the companies fighting against Tesla, Rivian and Lucid. It’s now the traditional car companies they’ve had relationships with for decades. Even Hyundai now sells cars on Amazon, and although the delivery process goes through a traditional dealer, it’s a big change from the way things have always been done.
We expect to see more of these disruptions as the electrical revolution continues.
Contact the author: patrick.george@insideevs.com
