Honda and Sony recently joined forces to form the new EV brand Afeela, whose debut model, the Afeela 1 liftback sedan, has been open for reservation by residents in California since the start of the year. However, not everyone is happy, as Afeela’s direct-to-consumer sales model has sparked backlash from existing Honda and Acura dealerships in the state.
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As first reported by Automotive News, the California New Car Dealers Association (CNCDA) wants American Honda, together with Sony Honda Mobility – the joint venture overseeing the Afeela brand – to immediately stop accepting reservations and deposits for the Afeela 1, claiming that the direct-to-consumer sales model violates the state’s dealer franchise laws.
California Dealer Group Not Happy With Direct Sales Model
The CNCDA argues that the dealer franchise laws prohibit automakers from competing with their own franchisees by using affiliates to directly sell or service vehicles. According to the dealer group, which represents more than 1,200 dealerships across California, both American Honda and Sony Honda Mobility are commonly owned by the same Honda parent company, and that Afeela vehicles will even be built at Honda plants that currently produce Honda and Acura vehicles.
Production of the Afeela 1 is expected to start later this year, with first deliveries slated for 2026. The car is priced from about $90,000 and comes standard with a 91-kWh battery powering a dual-motor all-wheel-drive powertrain. Each motor is rated at 241 hp, and Afeela said the EPA range estimate should come in at around 300 miles. Charging at up to 150 kW will be possible, and a NACS-type charging port will be standard.
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Under the direct-to-consumer sales model, existing Honda and Acura dealerships would miss out on the opportunity to sell Afeela products and provide servicing. Afeela plans to operate its own stores and has already opened one in Los Angeles and another in San Francisco, though both are currently temporary locations.
When contacted by Automotive News, an American Honda spokesperson said the new Sony Honda Mobility joint venture is a separate company from American Honda. The spokesperson also said American Honda isn’t involved in any of the decision-making for Sony Honda Mobility.
VW’s Scout Brand Also In The Crosshairs
The CNCDA first targeted the Volkswagen Group late last year over its plan to adopt a direct-to-consumer sales model for its new Scout EV brand. The dealer group filed a lawsuit in April, which remains unresolved. The outcome of that lawsuit will likely influence how Honda proceeds.
Brands like Tesla, Rivian, and Lucid have long maintained their own stores in California, though none of them are affiliated with traditional automakers that already operate dealerships in the state – although in Rivian’s case, that is beginning to change, as VW Group has pledged a $5.8 billion investment in the company.
Sources: Automotive News
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