Scout Motors vs. Dealers: The Battle Over California Franchise Laws
Episode 174
*Published this one so fast, I didn’t even edit it!* The California New Car Dealers Association (CNCDA) is slamming the brakes on Volkswagen and its EV sidekick, Scout Motors, with a lawsuit spicier than a jalapeño-fueled road trip. The charge? Violating California’s franchise laws by attempting to sell vehicles directly to consumers. Ellena Sweet, a third-gen dealer, CNCDA board member and Chief Compliance Officer at Stevens Management, explained that Scout Motors knowingly opposed the 2023 franchise law amendment that would make their direct-to-consumer model illegal. The lawsuit seeks to halt Scout’s sales in California and impose a $2,500 fine for each deposit taken, totaling approx $35 million. The core issue centers on manufacturers being prohibited from competing directly with their franchisee dealers, with VW’s bankroll and Scout’s “affiliate” status stirring the pot and being a key point of contention. There’s gonna be so much more to this conversation, subscribe to the show to stay up to date!
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Read the full lawsuit here.
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This episode is sponsored by DriveItAway and FleetIT.
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