Calif. judge clears path for dealer association lawsuit over Sony Honda EV sales

A California judge will allow the California New Car Dealers Association’s (CNCDA) lawsuit against American Honda and Sony Honda Mobility to move forward, overruling the automakers’ motion to dismiss.

Driving the news: In an order issued March 9, the Los Angeles County Superior Court overruled several demurrers, or objections, filed by the companies.

The CNCDA, which filed the case in August 2025, alleges the companies are violating California franchise law by selling Afeela-brand vehicles directly to consumers instead of through Honda and Acura dealerships.
Additionally, the court found that Sony Honda’s $200 “Reservation Agreement” represents the first step toward purchasing an Afeela vehicle and ruled that Sony Honda is sufficiently affiliated with American Honda for the lawsuit to proceed.

For context: The CNCDA’s position is that the automakers are “violating the law right now by taking deposits and opening delivery centers, and making plans to sell and distribute vehicles,” CNCDA President Brian Maas told CDG News.

Assembly Bill 473, enacted in 2023, prohibits automakers from using affiliated brands to compete with franchised dealers.

Despite that, the CNCDA said Sony Honda plans to deliver vehicles directly to California consumers in the second half of 2026. The association seeks declaratory and injunctive relief to stop direct-to-consumer Afeela sales.
Honda did not yet respond to a request for comment.

What they’re saying: Mass said the judge's decision was a good step in the right direction and shows that the group stated viable causes of action, allowing discovery to proceed.

“Now it's incumbent upon us to continue to hold Sony Honda's feet to the fire, and make them explain to the court how they think they're not violating California law,” Maas said.

What’s next: The association will now gather evidence and question company executives for depositions, and Maas said they plan to work with urgency, with a focus on how quickly Sony Honda plans to deliver those vehicles.

“Because we don't want them to distribute vehicles illegally; that's the whole point of the lawsuit,” Maas said. “It would be a lot easier for everyone if the case reaches some resolution before Sony Honda starts distributing vehicles to customers…”.

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Worth noting: Sony Honda Mobility of America on March 5 announced the grand opening of its AFEELA Studio & Delivery Hub Fremont in northern California, calling it the destination where customers can experience the AFEELA 1 through guided demonstrations and take delivery of the vehicle through a personalized delivery experience.

The March 14 ribbon-cutting ceremony is a private event with company executives, local officials and customers who have Afeela 1 reservations, according to the release.

Zooming out: Monday’s ruling about Sony Honda comes about one week after two dealers filed a class-action lawsuit against Volkswagen and Scout regarding its plan to sell directly to consumers. That case was the third filed against Volkswagen and/or Scout.

The CNCDA also filed a suit against Volkswagen in April 2024. The automakers filed a motion to dismiss in that case, too, though no ruling has yet been made.

Bottom line: Dealers and dealer associations fighting manufacturers in court is generally a rare thing, but with many seeing direct-to-customer sales as a direct threat to the franchise system, perhaps we’ll see more. Until then, dealers and OEMs will watch the outcomes of all the pending and future litigation.

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