Colorado VW, Audi, Porsche Dealers Sue The State For Letting Scout Sell Directly To Customers

Good morning! It's Thursday, January 22, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, Volkswagen group dealers in Colorado are suing the state for letting Scout sell cars directly to customers, Mitsubishi is looking to go downmarket again following the Mirage's death, Hyundai just surpassed General Motors in value because of robots and Hyundai's Korean union is worried those robots could threaten jobs.

I'm not a parent, but I know it can be a real pain when the kids start fighting with each other, and I'm sure that's how the Volkswagen Group feels right now. A group of 10 Colorado VW, Audi and Porsche dealers are suing the state over a December vote that allowed Scout — another Volkswagen company — to sell vehicles directly to customers by granting it a dealer license. In total, there are 28 VW, Audi and Porsche dealers in the state, and additional stores could join the suit.

The lawsuit, filed in Denver District Court, alleges that Colorado's Department of Revenue Division of Motor Vehicles incorrectly interpreted the state's law when it found that Scout only manufactured EVs, and it downplayed Volkswagen Group's financial backing of the brand.  From Automotive News:

Scout's dealer application and subsequent letter to the department, according to the suit, asserted that it could receive a license due to two exceptions under Colorado law: Scout had no franchised dealers of the same line-make in the state and because the manufacturer builds only electric vehicles and has no franchised dealers of the same line-make in the state.

Colorado's Motor Vehicle Dealer Board, which includes three new-car dealers, voted 6-2 on Dec. 16 to approve Scout's application to become a dealer in the state.

The remainder of the Motor Vehicle Dealer Board consists of three used-vehicle dealers and three members of the public.

The Colorado license was a notable victory for Scout as it pursues direct-to-consumer sales in the U.S. The vote created more consternation among dealers nationwide as the issue of direct-to-consumer sales intensified.

Along with Colorado, Scout is licensed to sell directly to customers in California, and it has gained various permits in other states. Don't worry, it has faced challenges from salty dealers in those states, too. Usually, Scout or Volkswagen of America are the ones being sued, but that's not the case here.

"This is a judicial review process of agency action," Sox told Automotive News. "This is a little different than like what we've done in Florida or what California has done where you end up in federal court, Scout is the defendant and you're saying, 'Hey, they're violating the law by what they're doing.'"

[...]

A spokesperson for the Colorado Department of Revenue's Specialized Business Group, which includes the board, said the department does not comment on pending litigation.

Scout's decision to sell an extended-range electric vehicle energy system alongside a full electric version of the Traveler SUV and Terra pickup is at the center of the lawsuit.

The lawsuit refers to Scout's extended-range system as a plug-in hybrid system and therefore claims that the brand does not qualify for exceptions in Colorado law which are meant for EV-only brands such as Rivian and Lucid.

The lawsuit goes on to allege that Scout's connection to Volkswagen Group makes it no different than Audi, Porsche or VW in Colorado, and those three brands are prohibited from owning, operating or controlling a dealership.

While I get why these dealers are miffed at the state and Volkswagen Group, perhaps if dealerships hadn't created such a terrible image for themselves over the past decades, this wouldn't be an issue.

In 2025, Mitsubishi's U.S. sales dropped nearly 14% as the company dealt with the tragic death of the bargain-basement Mirage, which accounted for more than a quarter of all Mitsubishis sold in 2024. Now, the Japanese automaker is looking to gain back some of the ground it lost by offering a decontented version of the Outlander Sport — a car that doesn't really have much content to begin with, despite its $26,740 starting price.

To get the job done, Mitsu could possibly reintroduce the front-wheel-drive version of the Outlander Sport's base S trim level, which has been all-wheel-drive only since 2023. From Automotive News:

"Another trim, a lesser trim, to try and lower cost to where maybe a Mirage customer could stretch a little bit to get into the SUV," said Hill, who owns RC Hill Mitsubishi-DeLand and RC Hill Mitsubishi-Ocala in Florida. "That's an important thing that we're supposed to see in '26. It may be a '27 model, but that's supposed to be coming, so we're waiting on details on that."

[...]

Hill said the Mirage, which was one of the few vehicles available that started under $20,000, was a great value for consumers.

Mitsubishi is updating its portfolio in 2026 with a new electric crossover and an off-road variant of the Outlander, its top-selling vehicle in the U.S. Hill got a glimpse of the off-road centric Outlander and said it looked better than he expected.

Hill said he doesn't have high expectations for the EV, but believes it could fill a need for some buyers.

"I think that dealers are pretty lukewarm on the prospect of an EV at this point," Hill said. "We feel like Mitsubishi recognizes that. They are not going to be full-EV focused."

He said that he expects 2026 to be a challenging year for the budget brand, but he doesn't expect the company to go anywhere. He told Auto News that Mitsubishi seems "very, very committed" to North America, so all of you folks predicting that Mitsubishi would be the next automaker to close up shop should turn your attention elsewhere.

Congrats, Hyundai! You just overtook General Motors as the world's fourth-most valuable automaker, and oddly enough, it's not because of cars. It's because of a push toward robotics à la Elon Musk and Tesla.

Shares of Hyundai surged 15% on January 21, hitting a new record and putting it firmly atop the leaderboard of best-performing stocks in Asia this year with an 85% advance. The gains pushed its market cap to about $76.4 billion, edging GM's $72.6 billion. From Bloomberg:

The rally kickstarted early this month with the unveiling of its latest iteration of a humanoid robot, with market momentum building as analysts hiked their price targets and investors hunt for AI-related opportunities.

The Atlas robot is built by Hyundai's Boston Dynamics unit and is set to start work in the carmaker's plants in 2028. The auto firm's partnerships with Nvidia Corp. and Google DeepMind in robotics has further fueled interest.

[...]

Hyundai Motor closed at 549,000 won. Affiliates including logistics arm Hyundai Glovis Co., parts supplier Hyundai Mobis Co. and tech firm Hyundai Autoever Corp. have risen alongside the automaker to all hit records this month.

Some industry analysts feel that Hyundai is the only automaker that can actually rival Tesla when it comes to physical AI. Based on how well Tesla's robots are doing right now, I wouldn't be shocked if Hyundai actually surpasses the Austin, Texas-based company.

Those same analysts believe Hyundai's robotics business will offer a turning point in increased productivity. 

That theoretical robot productivity has some folks worried, including the labor union at Hyundai. They warned the automaker against deploying humanoid robots without union approval, saying these robots would bring "employment shock." Right now, the automaker plans to deploy them starting in 2028, and workers are deeply troubled over the idea, according to an internal letter reviewed by Reuters.

The union has accused Hyundai of trying to boost profits by deploying robots to reduce headcount at its factories. From Reuters:

"Remember ​that without labour–management agreement, not a single robot using new technology will be allowed to enter the workplace," the union said.

[...]

It ⁠said that it aimed to build a factory capable of manufacturing ‍30,000 robot units annually by 2028 and that it planned to deploy humanoid ‌robots ‌at its U.S. plant in Georgia starting in 2028, with a goal to expand adoption across all production sites.

Tensions are already high between Hyundai and the union. It has recently criticized the automaker for its efforts to shift production to the U.S., saying that its new factory in Georgia was already hurting domestic production and threatening job security and two factories in Korea. In 2025, Hyundai said that the factory would reach an annual production capacity of half a million vehicles by 2028 as it deals with tariffs put in place by President Donald Trump.

History.com

A quick look through History.com's "Today in History" page showed a rather bleak affair, so why not take the time to celebrate an incredibly important birthday: Guy Fieri? My goat is 58 years old today, and he doesn't look a day over 55. Once I'm done writing this, I'm going to lock in for a Diners, Drive-Ins and Dives marathon. It's the only appropriate way to celebrate. 

This is probably one of my favorite 1975 songs, and to this day, I've got no idea what the hell is happening in this music video or what it has to do with the song or its lyrics. Still, we love it.