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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.”

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Episode #1249: We dig into why affordability—not EV tech—is the real sales bottleneck heading into 2026, how agentic shopping is reshaping the idea of ‘merit’ across retail, and why Jeff Daniels’ new stage play about a struggling dealership is hitting close to home for the auto industry.

• In a wide-ranging interview with Automotive News, Chevrolet dealer council leader Andy Guelcher explains why affordability—not EV tech—is the industry’s biggest hurdle heading into 2026, and how pricing discipline, incentives, and used EVs will ultimately determine sales momentum.
  • Guelcher warns that $1,000-plus monthly payments are unsustainable and, if not addressed, will put real pressure on future vehicle sales.
  • Lower inventory levels have helped dealers protect gross, but affordability now requires more creativity in financing, leasing, and lender mix.
  • From a Chevy standpoint, Guelcher says disciplined inventory management and a renewed focus on lower-MSRP models position the brand well if affordability improves.

• Hollywood meets the showroom as actor Jeff Daniels brings car dealer drama to the stage. A new play written by a former Automotive News editor puts a struggling dealership — and the people who love the business — front and center, minus the tired stereotypes.
  • The Classic King follows four salespeople racing to save a dealership after losing its new-car franchise, which was inspired by real dealership closures during the Great Recession
  • The play is written by former Automotive News editor Richard Johnson and directed by Jeff Daniels at Michigan’s Purple Rose Theatre.
  • Daniels praised the script, saying, “There’s a lot of heart in it and a lot of humor… it speaks to people who don’t just have a job — they love what they do.”

• AI is officially coming for the shopping cart. Shopify president Harley Finkelstein says “agentic commerce” could fundamentally change how consumers discover and buy products—shifting power away from ads and toward relevance, fit, and merit
  • Shopify is betting big on agentic commerce, citing a 14x increase in orders driven by AI agents in just the past year.
  • Google’s new Universal Commerce Protocol (UCP), backed by Shopify, Walmart, and others, aims to standardize how AI agents shop across brands.
  • Rather than replacing e-commerce sites, agentic shopping is expected to act as a powerful new “spoke,” potentially accelerating overall e-commerce adoption.

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Episode #1248: Dealer confidence takes a hit as affordability pressures and tighter margins creep into Q4, even as fixed ops and F&I try to hold the line. Meanwhile, Wawa goes all-in on Tesla charging, and the Vegas Sphere model heads to DC.

Show Notes with links:

• Dealer sentiment isn’t what it was in Q3 as affordability pressures, rising rates, and tighter margins took their toll on the Q4 numbers. While conditions remain technically “favorable,” confidence slipped quarter over quarter, with dealers signaling tougher days ahead despite strength in fixed ops and F&I.
  • Dealers rated current performance at 62.3, down 5 points from Q3 and the lowest of any industry segment, citing consumer affordability as the biggest drag.
  • Rising interest rates and payment-driven shoppers are shrinking showroom traffic and compressing grosses as price transparency intensifies competition.
  • Fixed ops and F&I remain bright spots, though confidence there also dipped compared to Q3 as financing conditions worsened.
  • Used-vehicle operations grew more challenging, with quality—not quantity—becoming the main inventory issue after years of tight supply.

• Wawa is slapping its logo on Tesla Superchargers. The popular convenience store giant has launched its first self-branded Tesla Supercharger site, signaling a deeper push into EV infrastructure.
  • The first Wawa-owned, Wawa-branded Supercharger site is now live in Alachua, Florida, featuring 16 ultra-fast 325 kW stalls.
  • The site operates under Tesla’s new Supercharger for Business program, where Tesla installs and manages chargers while Wawa controls pricing.
  • Charging is set at $0.37 per kWh, and Wawa hasn’t disclosed how many more branded sites are planned—but its 1,200+ stores offer big expansion potential.

• The Vegas Sphere is coming to a Nations Capital near you. Sphere Entertainment plans a 6,000-seat “mini-Sphere” in National Harbor, Maryland, bringing its eye-popping screens and immersive tech to the DC area, along with a billion-dollar price tag and big economic promises.
  • The DC-area Sphere will be about one-third the size of Las Vegas, but feature the same massive screen, immersive audio, 4D effects, and haptic seating.
  • Construction is expected to cost over $1 billion, supported by roughly $200 million in state, local, and private incentives—some requiring voter approval.

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 car on the #1 online retailer.

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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