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Volvo faces legal pushback in California on possible pivot to Tesla-style direct sales model
On Tuesday, the California New Car Dealers Association (CNCDA) filed a petition against Volvo USA with California’s New Motor Vehicle Board claiming the legacy car maker violates state franchise laws banning manufacturer competition with dealerships. The group claimed the “Care by Volvo” (CbV) subscription service launched in early 2018 which provides all-in-one packages of 24-month leases, premium insurance, concierge service, and most vehicle maintenance, was using Volvo dealers as de facto “agents” in an effective practice of dealing directly to consumers. The move is reminiscent of Tesla’s struggles, itself being the subject of dealer franchise-focused legal actions. However, the legal questions aside, the sum of CNCDA’s complaints additionally indicate its objection to Volvo’s possible ongoing shift to a Tesla-style overall direct-sales model.
In Volvo’s CbV subscription plan, buyers select from two currently offered models – the S60 and XC40, including customizations – via an app or a corporate-run website. Once the car selection is final, an agent from Volvo’s financial services company (the “Volvo Concierge”) contacts the buyer and finalizes the package particulars, after which delivery is scheduled at a local participating dealership. During the online process, the customer is given a guaranteed monthly subscription price with the option to upgrade after 12 months and chooses the dealership that will complete the sale. Volvo provides the financing directly through a separate financing branch, and the insurance is provided by Liberty Mutual. The dealer handles the final sales contract, payment, and vehicle hand-off.
While the dealerships participate in the CbV program voluntarily and receive an 8% sales commission, CNCDA claims the process significantly limits the dealer’s ability to build a (profitable) relationship with the customer and eliminates dealer earnings potentials stemming from financing services and other package “add-ons” during the sales process. On its face, this might seem like a reasonable argument, but Volvo’s perspective seems to be addressing customer preferences, a new era of sales strategies, and an effort to reach a new customer market. In an aim to make the brand more appealing to a younger generation accustomed to app-based ride-hailing and a la carte video entertainment services, Volvo may be hoping CbV will help them make inroads towards Millennials in particular.
In an interview with Global Fleet, Alan Visser, CEO of Volvo’s Chinese sister brand, Lynk & Co., detailed how the Millennial connection is explicitly part of that company’s subscription-only business model: “On the other [hand], there is [the] smartphone aspect…Millennials want maximum flexibility and all-inclusive pricing rather than long-term commitments and hassle. Our subscription model is more than just a private lease. It includes services like pick-up and delivery, cleaning, and lots of other things I cannot disclose just yet,” he stated. Also, Lynk & Co intends to only sell hybrids and/or battery electrics, adding yet another Volvo parallel to Tesla. That, and its plan for showcasing its vehicles prior to customer purchase: “In large urban areas we will have so-called offline stores: small, sociable brand boutiques,” Visser additionally explained in the interview.
In their petition, the California dealer’s group made the connection between Lynk & Co and Volvo USA a key part of their case for Volvo’s competition law violation. According to Jalopnik’s review of a pre-production model of Lynk’s first vehicle, the direct-sales subscription is possibly being tested in the US via the Care by Volvo program. “They’re very eager to try out this subscription model of car ownership, or subscribership…They’re sort of testing the waters with the Care by Volvo program, which is proving to be a good plan,” Torchinsky writes, summarizing his talks with the company’s representatives. This article was referenced in CNCDA’s petition against Volvo’s CbV program. Torchinsky goes on to further describe how the dealership experience “sucks” enough for consumers to have opened up a new market for doing car sales business which Lynk has intentionally capitalized on.
Protecting dealers doesn’t appear to be the main priority of CNCDA. In their petition, the New Car Dealers Association seems to be taking the biggest issue with Volvo’s possible negative position on the franchise model entirely, using the legal system as a toolkit to keep customers stuck in an aging infrastructure rather than innovating with the times and finding less restrictive ways to make everyone happy. “‘Subscription programs’ like CbV have been described as a way for the manufacturer to cut out the dealer and ultimately eliminate the franchise model,” the group stated in the introduction of their petition to the New Motor Vehicle Board. Where franchise laws were set up to protect dealers from forced manufacturer bidding, the association seems to be attempting to morph manufacturers wanting to do their own customers’ bidding into an attack on dealer rights. Tesla has certainly encountered this type of morphing even without the challenge of having private dealerships.
In December of last year, a Connecticut state court judge concluded that Tesla’s Greenwich Ave. gallery was operating like a dealership and required a license to do so, something the electric vehicle company is not eligible for because it doesn’t have franchises. The Connecticut Automotive Retailers Trade Association (CARA) was the party responsible for initiating the proceedings which led to the judgment, an organization often at the front lines of defending the state’s franchise laws from would-be offenders. CARA holds the position that vehicle sales should only be conducted through licensed independent dealerships, leaving direct-sales manufacturers like Tesla with limited options for providing its products to customers wanting to buy them.
The car subscription model isn’t unique to Volvo. Luxury car manufacturers especially seem to have also discovered the new market potential of app-driven car flexibility: Access by BMW has price tiers in the $2000-$3700 range for their packages (which include unlimited vehicle swapping), but it’s only available in Nashville, Tennessee for now. The UK-only Carpe by Jaguar Land Rover has $1200-$2900 packages with similar features as CbV, the Mercedez-Benz Collection is similar in price to Carpe, and a few others in that range are being developed and expanded by their respective manufacturers. Several third-party subscription services have also popped up with more flexible lease terms and more economical pricing. Clearly, the trend is showing data points that are worth investment attention.
With all the controversy, it might not even be dealerships that stand to lose the most with subscription models. The case has been made for classifying them as rental cars, which would be another market that might take issue with manufacturers latest ideas for doing business. Some of the services, like Flexdrive, are practically set up to be permanent rental solutions. As with all things, though, only time will tell.
2019-1-15 CNCDA Petition Re… by on Scribd
Elon Musk
Tesla Optimus Gen 3 is coming to the Tesla Diner with new ambitions
Tesla’s Optimus robot left the Hollywood Diner within months of opening. Now Musk is planning its return with a bigger role and a major Gen 3 upgrade underway.
![Tesla Optimus Gen 3 [Credit: Tesla]](https://www.teslarati.com/wp-content/uploads/2026/03/tesla-optimus-gen3-diner.jpg)
Tesla’s Optimus robot was one of the most talked-about features when the Tesla Diner opened on Santa Monica Boulevard in Hollywood on July 21, 2025. Dubbed “Poptimus” by Tesla fans, the Gen 2 robot stood upstairs at the retro-futuristic, drive-in theater and Tesla Supercharging station, scooping popcorn into bags and handing them to guests with a wave.
The diner itself had been years in the making. Elon Musk first floated the idea in 2018 with a tweet about building an “old-school drive-in, roller skates & rock restaurant” at a Hollywood Supercharger. What eventually opened was a unique two-story neon-lit space, with 80 EV charging stalls, and Optimus serving as a live demonstration of where Tesla’s ambitions were headed.
If our retro-futuristic diner turns out well, which I think it will, @Tesla will establish these in major cities around the world, as well as at Supercharger sites on long distance routes.
An island of good food, good vibes & entertainment, all while Supercharging! https://t.co/zmbv6GfqKf
— Elon Musk (@elonmusk) July 21, 2025
But Optimus did not stay long, and was gone by December 2025.
Now, the robot is set to return with a more demanding job. Musk has ambitions for Optimus to take on a food runner role in 2026, delivering meals directly to cars at the Supercharger stalls. While the latest Gen 3 Optimus is likely to initially take on its previous popcorn-serving role, it wouldn’t be out of the question for Optimus to see a quick promotion. With improved hand dexterity that features 50 total actuators and 22 degrees of freedom per hand, and significantly more powerful processing through Tesla’s latest AI5 chip that includes Grok-powered voice interaction, Musk described Optimus at the Abundance Summit on March 12, 2026, as “by far the most advanced robot in the world, Nothing’s even close.”
Back to work
See you at Tesla Diner tomorrow pic.twitter.com/H3tTajrUbu
— Tesla Optimus (@Tesla_Optimus) March 30, 2026
That confidence is backed by a major manufacturing shift. At the Q4 2025 earnings call in January, Musk announced Tesla would discontinue the Model S and Model X and convert those Fremont production lines to build Optimus. “It’s time to basically bring the Model S and X programs to an end,” he said, calling for a pivot that reflects where the Tesla’s future lies.
Elon Musk
Musk forces Judge’s exit from shareholder battles over viral social media slip-up
McCormick insisted in a court filing that she harbors no actual bias against Musk or the defendants. She claimed she either never clicked the “support” button, LinkedIn’s version of a “like,” or did so accidentally.
Many Tesla fans are familiar with the name Kathaleen McCormick, especially if they are investors in the company.
McCormick is a Delaware Chancery Court Judge who presided over Tesla CEO Elon Musk’s pay package lawsuit over the past few years, as well as his purchase of Twitter. However, she will no longer be sitting in on any issues related to Musk.
Elon Musk demands Delaware Judge recuse herself after ‘support’ post celebrating $2B court loss
In a rare admission of potential optics issues in one of America’s most powerful corporate courts, Delaware Chancery Court Chancellor Kathaleen McCormick stepped aside Monday from a cluster of shareholder lawsuits targeting Elon Musk and Tesla’s board.
The move came just days after Musk’s legal team highlighted her apparent “support” on LinkedIn for a post that mocked the billionaire over his 2022 tweets about the $44 billion Twitter acquisition.
McCormick insisted in a court filing that she harbors no actual bias against Musk or the defendants. She claimed she either never clicked the “support” button, LinkedIn’s version of a “like,” or did so accidentally.
She wrote in a newly published memo from the Delaware Chancery Court:
“The motion for recusal rests on a false premise — that I support a LinkedIn post about Mr. Musk, which I do not in fact support. I am not biased against the defendants in these actions.”
Yet she granted the reassignment anyway, acknowledging that the intense media scrutiny surrounding her involvement had become “detrimental to the administration of justice.”
The consolidated cases will now be handled by three of her colleagues on the Delaware Court of Chancery, the nation’s go-to venue for high-stakes corporate disputes. The lawsuits accuse Musk and Tesla directors of breaching fiduciary duties through lavish executive compensation and lax governance oversight.
One prominent claim, filed by a Detroit pension fund, challenges massive stock awards granted to board members, alleging the payouts harmed the company. The litigation also overlaps with issues stemming from Musk’s turbulent 2022 Twitter purchase.
McCormick’s history with Musk made her a lightning rod. In 2022, she presided over the fast-tracked lawsuit that ultimately forced Musk to complete the Twitter deal after he tried to back out.
Then in 2024, she struck down his record $56 billion Tesla compensation package, ruling the approval process was flawed and overly CEO-friendly. The Delaware Supreme Court later reinstated the pay on technical grounds, but the ruling fueled Musk’s long-standing criticism of the state’s judiciary.
Musk has repeatedly urged companies to reincorporate elsewhere, arguing Delaware courts have grown hostile to visionary leaders. Monday’s recusal hands him a symbolic victory and underscores how personal social-media activity can collide with judicial impartiality standards.
Delaware law requires judges to step aside if there’s even a “reasonable basis” to question their neutrality.
Court watchers say the episode highlights growing tensions in corporate America’s legal epicenter. While McCormick maintained her impartiality, the appearance of bias proved too costly to ignore. The cases will proceed without her, but the broader debate over Delaware’s dominance in business litigation is far from over.
Elon Musk
Elon Musk has generous TSA offer denied by the White House: here’s why
Musk stepped in on March 21 via a post on X, writing: “I would like to offer to pay the salaries of TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout the country.”
Tesla and SpaceX CEO Elon Musk made a generous offer to pay the salaries of Transportation Security Administration (TSA) employees last week, but the offer was denied by the White House.
In a striking display of private-sector initiative clashing with federal bureaucracy, the White House has turned down an offer from Elon Musk to personally cover the salaries of TSA officers amid an ongoing partial government shutdown. The rejection, reported last Wednesday by multiple outlets, highlights the legal and political hurdles facing unconventional solutions to Washington’s funding gridlock.
The impasse began weeks ago when Congress failed to pass funding for the Department of Homeland Security (DHS), leaving TSA employees, essential workers who screen millions of travelers daily, without paychecks while still required to report for duty.
Frustrated travelers have endured record-long security lines at major airports, with reports of chaos and delays rippling across the country.
Musk stepped in on March 21 via a post on X, writing: “I would like to offer to pay the salaries of TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout the country.”
I would like to offer to pay the salaries of TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout the country
— Elon Musk (@elonmusk) March 21, 2026
But it was not for no reason.
White House spokesperson Abigail Jackson responded on behalf of the Trump administration, expressing appreciation for Musk’s gesture.
However, the legal obstacles, which would be insurmountable, would inhibit Musk from doing so. Jackson said:
“We greatly appreciate Elon’s generous offer. This would pose great legal challenges due to his involvement with federal government contracts.”
Musk’s companies hold significant federal contracts, including NASA launches through SpaceX and potential Defense Department work, raising concerns about conflicts of interest, ethics rules, and anti-bribery statutes that prohibit private payments to government employees. Administration officials also indicated they expect the shutdown to end soon, making external funding unnecessary.
The episode underscores deeper tensions in Washington. Musk, who has advised on government efficiency efforts and maintains a close relationship with President Trump, has frequently criticized wasteful spending and bureaucratic delays.
His offer came as airport security lines ballooned, drawing public frustration toward both parties. TSA officers, many of whom rely on paychecks to cover mortgages and family expenses, have continued working without compensation, a situation that has drawn bipartisan concern but little immediate resolution.
Critics of the rejection argue it prioritizes red tape over practical relief for frontline workers and travelers. Supporters of the White House position counter that allowing private funding sets a dangerous precedent and could undermine congressional authority over the budget.
The White House eventually came to terms with the TSA on Friday and started paying them once again, and lines at airports instantly shrank. The Department of Homeland Security (DHS) said that TSA staf would begin receiving paychecks “as early as” today.
![Tesla Optimus Gen 3 [Credit: Tesla]](https://www.teslarati.com/wp-content/uploads/2026/03/tesla-optimus-gen3-diner-80x80.jpg)
Tesla Optimus Gen 3 is coming to the Tesla Diner with new ambitions
Musk forces Judge’s exit from shareholder battles over viral social media slip-up
Elon Musk has generous TSA offer denied by the White House: here’s why
Elon Musk says Tesla is developing a new vehicle: ‘Way cooler than a minivan’
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
