The California New Car Dealers Association has filed a lawsuit against Honda Motor and Sony Honda Mobility, accusing them of bypassing state franchise laws to sell cars directly to consumers.
The complaint, lodged on August 19 in Los Angeles County Superior Court, claims the companies are sidestepping Honda and Acura dealerships to market their upcoming electric vehicle, the Afeela 1, scheduled to hit the market in early 2026.
Association president Brian Maas called the move “a direct attack on the 161 Honda and Acura dealers in California, who have been loyal partners in building the brand’s reputation for decades”. Maas argued that excluding dealers strips consumers of essential protections like local support, transparent pricing, and warranty services.
The 50-50 joint venture between Honda and Sony has already begun accepting $200 deposits from California residents interested in reserving the Afeela 1. According to the dealer group, this practice amounts to unfair competition and deceptive advertising.
The association is seeking an immediate court injunction to halt reservations and force all future sales through licensed franchise dealers, as required by California Assembly Bill 473, unanimously passed in 2023 and signed into law by Governor Gavin Newsom. The bill prohibits automakers from launching affiliated brands that directly compete with their own dealer networks.
Sony Honda Mobility showcased the Afeela 1 at CES 2023, confirming production will take place at Honda’s East Liberty, Ohio plant, which also builds Honda and Acura vehicles. While the company insists it operates independently from Honda, California dealers argue that shared ownership and facilities clearly establish affiliation under state law.
To promote the EV, Sony Honda Mobility has opened temporary showrooms in Santa Clara, Los Angeles, and beyond, with permanent “Afeela Studio and Delivery Hub” locations planned for Torrance and Fremont later this year. This legal battle could set a major precedent. At stake is not only the fate of a single electric vehicle, but the broader struggle between direct-to-consumer innovation and the long-standing franchise dealership system.
