Here we go again.
Just as U.S. Volkswagen dealers are gearing up to fight Scout Motors’ plan to sell cars directly to consumers, Honda’s U.S. dealer network is already gathering its troops to battle Sony Honda Mobility’s plans to do the same. But the fact that these fights are happening at all speaks volumes about the uncertain future of the entire dealership system.
At CES 2025, the joint venture between the two Japanese consumer tech giants announced that it too wants to use a Tesla- and Rivian-style direct-to-consumer model to sell its upcoming Afeela electric vehicles, instead of a traditional franchised dealer model.
“We are taking a direct consumer approach to simplify the customer experience and enhance your satisfaction,” Shugo Yamaguchi, CEO of Sony Honda Mobility of America, told reporters at the tech trade show this past week. “All processes from reservation to sales are taken care of through our website.” Yamaguchi added that taking reservations online for the Afeela 1 would be a “bridge without any hassle,” which, intentionally or otherwise, may say a lot about how the joint venture views the dealership system.
Naturally, America’s car dealers are wasting no time in pushing back.
In a statement published earlier this week, the National Automobile Dealers Association (NADA), the dealers’ largest trade and lobbying group, said “Not so fast.”
“We are unfortunately not surprised but are still very disappointed with Sony Honda Mobility’s stated plans to sell its vehicles directly to consumers and compete with its Honda and Acura dealer network,” NADA President and CEO Mike Stanton said. “Honda should understand that any misguided attempt to bypass or undercut its U.S. dealers will be challenged in statehouses and courthouses across the country—with NADA’s full support.”
Photo by: InsideEVs
Stanton added in his statement that NADA officials would like to meet with Sony Honda Mobility executives to try and avoid “unnecessary and protracted state-by-state legal challenges,” which similarly speaks volumes about how dealers view any incursion into the franchise model—especially when so-called “traditional” automakers get involved.
On its face, this may seem like just another dust-up between America’s dealers and two car companies: first VW, and now Honda. But at a deeper level, the latest developments in the EV industry are increasingly putting cracks into this country’s once rock-solid dealership model.
It goes like this: when it comes to new car sales, most countries have a mix of franchised, private dealerships and stores owned directly by auto manufacturers. This is generally not the case in the U.S. Over many decades, the dealerships formed a powerful political lobby that cemented into law requirements that new cars be sold only through their franchises—not directly from car companies themselves.
The dealers have long argued that as independent franchisees, they’re in the best position to protect consumers from unfair pricing, offer repairs and tailor their offerings to the needs of different regions. But the first company to truly strike a blow against this system was Tesla, which even early on believed dealers would not be motivated to sell EVs and preferred to sell cars directly and online.
Indeed, in the years since the rise of the modern EV, many dealers have been accused of not educating their sales staff about EVs or directing customers to gas-powered cars instead; the dealers have also emerged as a top voice lobbying against tighter fuel economy rules aimed at driving more electric sales.
The “dealer problem” is something that many car company executives recognize in private but cannot speak out against directly, as they fear running afoul of the sales networks they legally depend on. But newcomers like Tesla, Rivian and Lucid have found ways to sell directly to consumers, although their ability to do so often varies from state to state.
But now traditional car companies want to be more like the EV startups in various ways. And that means selling directly and online. In the case of Scout Motors, executives told InsideEVs last year that selling directly allows complete control over “the most important nodes of our operations, and that’s reservations, demonstration drives, transactions and financing, and warranty service.” And they did not pull their punches when asked about the frustrations they have encountered with existing EV sales and dealers.
“What we need from the front-line retail employees is full engagement, full enthusiasm and full dedication to pushing 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 something very different than that.”
Photo by: Scout Motors
But VW and Audi’s existing U.S. dealer associations—who are especially mad because they have clamored for more rugged SUVs and trucks from the German automaker for years—immediately responded with legal action and have indicated they’re prepared to do so on a state-by-state level. Yet at CES 2025, Thacker and Scout Motors CEO Scott Keogh both told InsideEVs they do not believe the dealers’ claims have any legal merit and they’re confident they will prevail in court.
Interestingly, the Afeela project seems destined to be in the same position.
While the Afeela 1 will be built in Ohio at Honda’s upcoming new EV hub—and is presumed to share components with Honda’s own next-generation EVs, the 0 Series—Sony is largely in the driver’s seat on this venture. And it certainly has no relationship with, or love for, America’s existing car dealer network.
While Honda and Acura dealers may be upset about it, if Scout Motors wins the right to sell directly, it’s very likely Afeela will be able to do it as well.
Photo by: Honda
Honda 0 Series Saloon Driving
(The Honda 0 Series, however, probably won’t be so lucky. While the automaker made no mention of sales plans at CES, it’s presumed that these EVs will be sold through traditional dealerships as would any other Honda. But how Honda plans to get its dealers ready to sell a high-tech, AI-powered smartphone on wheels is anybody’s guess.)
Yet this news represents a fascinating development in the story of dealers’ resistance to selling electric cars (and selling any kind of cars online): it’s not just Tesla and Rivian and Lucid they’re fighting against anymore. It’s now traditional car companies they’ve had relationships with for decades. Even Hyundai is now selling cars on Amazon, and while the delivery process does go through a traditional dealer, it’s quite a disruption from the way things have always worked.
Expect to see more such disruptions as the electric revolution continues.
Contact the author: patrick.george@insideevs.com
