The California New Car Dealers Association filed a lawsuit against American Honda Motor Co., Sony Honda Mobility Inc. and Sony Honda Mobility of America Inc., accusing the companies of violating state franchise laws.
The complaint, filed Aug. 19 in in Los Angeles County Superior Court, alleges that the companies are bypassing Honda and Acura dealerships to sell its Afeela electric vehicle directly to consumers.
“This is a direct attack on the 161 franchised Honda and Acura dealers in California that have been loyal partners in building the brand’s reputation and success for decades,” association president Brian Maas said in a statement.
“By cutting dealers out, they’re stripping vital consumer protections like local service support, transparent pricing and warranty assistance,” Maas said.
The 50-50 joint venture between the Japanese automotive and electronics giants began taking deposits from California residents for the Afeela 1, the first EV from the brand expected to arrive in early 2026.
The association, which represents more than 1,400 franchised dealers statewide, is asking the court for immediate injunctive relief to stop reservations and require that any future sales take place through licensed franchise dealers.
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Bypassing dealers violates California franchise laws, the association said
The association alleges unfair competition, false advertising and seeks declaratory relief, or judicial determination that defendants’ sales model violates California law.
The lawsuit against Sony Honda follows a similar action this year against Volkswagen Group and Scout Motors, which also sought to sell new EVs directly to California buyers. That case, filed in San Diego County Superior Court, is ongoing.
At the center of both disputes is Assembly Bill 473, passed unanimously by the California legislature in 2023 and signed into law by Gov. Gavin Newsom.
The law prohibits automakers from creating affiliated brands that compete directly with their franchised dealers, requiring that new vehicles be sold and serviced through franchisees.
The Afeela 1 will be built at Honda’s factory in Ohio
Sony Honda Mobility unveiled its first EV at CES in 2023. The Afeela 1 is slated to be built at Honda’s factor in East Liberty, Ohio, which also produces Honda and Acura vehicles.
The company has maintained that it is a separate entity from Honda, though the association argues the joint ownership and shared manufacturing clearly establish an affiliation under California law.
The association also contends that Sony Honda Mobility has ignored the statute by opening reservations online and taking $200 deposits from California residents. It also is marketing the EV in pop-up showrooms across the state.
Two locations in Northern California — Corte Madera and Santa Clara — offered exclusive viewings early this year. Another location in Los Angeles’ Century City mall operated until early August. Another temporary showroom is planned for San Diego’s Westfield UTC mall for three months starting Aug. 31.
Permanent “Afeela Studio and Delivery Hubs” are set to open this year in Torrance and Fremont, spanning both Southern and Northern California.
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