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Episode #1250: Colorado dealers filed suit on VW-backed Scout’s direct-sales license, insurers face political heat as profits soar and affordability cracks, and Lemonade rolls out Tesla Full Self-Driving-based insurance, hinting at a future where driving software sets the rate.

A group of Colorado VW, Audi, and Porsche dealers is suing the state after regulators approved a direct-sales dealer license for Scout Motors. Dealers argue the decision misreads state law and opens the door for OEMs to bypass franchised networks.

• • Ten VW, Audi, and Porsche dealers filed suit this week, alleging Colorado improperly granted Scout a dealer license by treating it as an EV-only manufacturer.
  • Dealers argue Scout’s extended-range EV system is effectively a plug-in hybrid, disqualifying it from EV-only exceptions in state law.
  • The lawsuit also claims Scout is an “alter ego” of Volkswagen Group, which already has franchised dealers and is barred from direct sales

The affordability conversation is turning its sights on insurers. After years of sharp rate hikes, home and auto insurers are posting near-record profits—and lawmakers are taking notice.

• Insurers are rebounding strongly, with the property and casualty industry posting its highest underwriting profit in nearly 20 years.
• Lawmakers in states like New York and Oklahoma are pushing profit caps, arguing rate hikes are out of step with household budgets.
• Auto insurance rates have stabilized nationally, but remain uneven by state, fueling continued consumer frustration.
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• Lemonade is launching a new auto-insurance product built specifically for Tesla Full Self-Driving users, promising per-mile rates up to 50% lower when the software is engaged—an early glimpse at how insurance may evolve alongside partial autonomy.
  • Lemonade will price insurance based on when Tesla’s Supervised Full Self-Driving system is active versus human driving.
  • The product relies on new vehicle telemetry data enabled through a technical collaboration with Tesla.
  • Launch begins in Arizona on January 26, with Oregon following a month later.
  • The move signals insurers are preparing for a future where software performance, not just driver behavior, sets risk and price.
  • Lemonade president Shai Wininger said, “A driver who can see 360 degrees, never gets drowsy, and reacts in milliseconds isn’t like any other driver.”

This episode of the Automotive State of the Union is brought to you by Amazon Autos: Meet customers where they shop: reach high-intent buyers shopping for their next

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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