As another auto manufacture plans to sell their electric vehicles in a direct to consumer model, the National Automobile Dealers Association (NADA) plan to challenge any attempts to bypass franchised dealers.
At the CES 2025 Expo earlier this month, the joint venture from Sony and Honda announced plans to bypass U.S. auto dealers to sell its first vehicle from its new automotive brand Afeela.
“We are taking a direct consumer approach to simplify the customer experience and enhance your satisfaction,” said Shugo Yamaguchi, CEO of Sony Honda Mobility of America. “All processes from reservation to sales are taken care of through our website.”
The company is following the footsteps of EV startups such as Tesla, Rivian and Lucid, who circumvented traditional auto dealers in favor of online sales and retail locations, unlike legacy automakers such as Honda.
EV Selling Trend
Scout Motors, backed by Volkswagen, recently announced its intention to sell its EVs directly to consumers, sparking criticism from NADA and dealers in California who claim doing so violates the state’s franchise laws.
Similar to VW franchisees, Honda dealers have voiced their concerns about selling Afeela 1 outside the established dealership structure as well as it being built at one of the automaker’s factories in Ohio. Deliveries of the more expensive Afeela Signature trim will start in the middle of 2026, with the Afeela 1 Origin arriving in 2027.
Yamaguchi said reservations will be available only to consumers in California, where the market is most active, and gradually expand to other areas. In addition to leveraging its website for reservations and sales, Sony Honda Mobility will open two physical locations in the second half of the year—Torrance and in Fremont, providing coverage in northern and southern and California.
NADA Push Back
After the Honda/Sony announcement, NADA President and CEO Mike Stanton released a statement that the organization was “unfortunately not surprised but are still very disappointed” with the plans to sell its vehicles directly to consumers and compete with its Honda and Acura dealer network.
“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,” said Stanton. “As we have communicated to Honda on numerous occasions…the franchise system is the best, most consumer-friendly, and most cost-effective way to sell and service new vehicles and deliver the customer experience that today’s marketplace demands.
Stanton offered that NADA official would welcome the opportunity to meet with the Sony Honda leadership to discuss how they could use the “proven success of the dealer franchise system to their benefit and avoid unnecessary and protracted state-by-state legal challenges.”
VW vs. California Dealers
The decision by Honda to sell directly in California comes on the he heels of one of the largest state dealer’s associations in the U.S. taken the first legal step to stop VW from implementing its plan to sell electric vehicles directly to consumers.
The California New Car Dealers Association (CNCDA) issued a cease-and-desist letter Dec.20, 2024, to VW and its affiliate Scout following their recent announcement that they plan to sell the electric vehicles to California consumers in what they believe is a violation of state law. CNCDA is the nation’s largest state dealer trade association, made up of nearly 1,200 California dealerships and over fifty VW dealerships.
CNDCA officials maintain Scout is a VW affiliate under California’s Vehicle Code. California law states that manufacturers may not compete with their own franchisees by using affiliates to directly sell or service vehicles, which Golden State dealers alleged is precisely what VW and Scout intend to do.