Inside Automotive with Jim Fitzpatrick, powered by CBT News

Brian Maas on California’s EV Trends and Dealer Advocacy

• Jim Fitzpatrick • Season 1 • Episode 35

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In this episode of Inside Automotive, CNCDA President Brian Maas unpacks the latest findings from the Q3 2025 California Auto Outlook and outlines the association’s current advocacy priorities. He explains how California’s unique economic and regulatory environment continues to shape EV adoption, dealer operations, and statewide retail trends.

Key topics explored:

  • California’s outsized impact on national EV sales and shifting consumer demand
  • How gas prices, commuting patterns, and expired incentives are influencing EV uptake
  • CNCDA’s regulatory and legal efforts, including ACC II adjustments and franchise law challenges
  • The implications of the California CARS Act ahead of its 2026 implementation
  • How upcoming gubernatorial changes may affect dealers statewide

Maas also discusses why California remains both a challenging and high-opportunity market, and how strong dealer advocacy ensures the industry’s voice remains central to policy decisions.

Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

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Announcer:

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick:

Hey everyone, Jim Fitzpatrick. Welcome into this special edition of Inside Automotive. We happen to have with us Mr. Brian Maas, who is the president of the California New Car Dealers Association and a good friend of CBT News. So California remains one of the most closely watched automotive markets in the country, as many of you know, and the latest numbers from the California New Car Deal Association offer some insight into where things are headed. Joining us now, as I mentioned, to discuss uh their Q3 auto outlook as well as share a general update on the association's advocacy efforts is Brian Maas, the president of the association. So, Brian, thank you so much for joining us.

Brian Maas:

Happy to be here, Jim, as always.

Jim Fitzpatrick:

Sure. So so let's uh jump right in here. What what stood out uh to you uh the most in the in this third quarter?

Brian Maas:

Uh well the obvious top line number was uh the increase in EV sales.

Jim Fitzpatrick:

Right.

Brian Maas:

Um California, of course, um now sell sold at least in the third quarter, 28% of all the EVs sold in the United States were sold in California. Um and our our market share uh is well into the mid-20s. Uh so nearly one out of every four vehicles. Wow, one sold in California was an EV. Um that's largely due to the pull forward sales, yeah um, because consumers understood that all the federal uh rebates were going away. Sure. Um and uh everybody was kind of in a rush in August and September to get those cars. Yeah. So that's clearly the top line. Um and I think uh what's missing from the top line is overall sales are pretty stable uh in California, and uh that's good news, even tariffs and high interest rates and all that kind of stuff.

Jim Fitzpatrick:

Yeah, that's fantastic. And it is interesting, as I've mentioned before on the show, that that the consumers came out, you know, even though you know we we heard so much, well, consumers don't want EVs right now. Obviously, in California they do. But even around the country where we saw this just this influx of customers coming in and picking up their EVs because of this tax incentive going away. Well, forget the tax incentive for a minute. People were buying EVs. I think that was a little bit of an eye-opener for the whole industry, don't you?

Brian Maas:

I do. I mean, obviously, uh we're in a different market in California. Right. Uh and uh EVs have had and continue to have uh a place. Uh I mean the Tesla Model Y is the number one uh selling car in California and has been for multiple quarters, even though overall Tesla sales have been dropping for for multiple quarters, but it's still the number one selling uh uh vehicle in the state. So uh I think what this should uh tell automakers and all of us in the industry is there is a place for electric vehicles in the new car market. Yeah. Even in an we'll find out how much, obviously in the fourth quarter and beyond, without the incentives, but there's definitely a place for EVs. Yeah. I think the ambitions of some that we're gonna quickly transition to a hundred percent EVs over the next decade, those hopes have been dashed a little bit. Yeah. But uh there's gonna be a significant uh piece of the market that's going to see um EVs in consumers' hands.

Jim Fitzpatrick:

Yeah, I agree, I agree. And it should be said that if the rest of the country uh suffered from the same prices, the same gas prices that California does, why we'd probably see you know pretty strong sales throughout the rest of the country. Because I was out there recently, I think I saw five or six dollars a gallon for a gallon of gas. And man, that'll get you headed in the EV direction real quick, right?

Brian Maas:

Yeah, we're about a uh give or take, a buck fifty more per gallon on average than uh the rest of the country. And uh our commutes tend to be longer than uh they are in some other markets across the country. So you combine a long commute with high gas prices, you're gonna think long and hard, how can I afford a hybrid or a plug-in hybrid or an EV or something to save me some money on gas?

Jim Fitzpatrick:

Yeah, for sure. Now that the incentive is gone, do you expect there to be a drop in EV sales in California?

Brian Maas:

I do. Um, the other thing that people don't talk about too much is uh there there was a program that the federal government ran uh that allowed EVs to have uh high occupancy vehicle lane stickers, and that program also expired on September 30th. So for a long time, people bought uh EVs so they could get in the HOV lane and go faster than their counterparts on uh the five or the 405 in LA uh and other freeways throughout California. Well, that's not an option any longer. So to answer your question directly, yeah, I think we're gonna see uh significant drop off in EV sales in the fourth quarter, especially compared with the high number in the third quarter. But uh, as we were talking about earlier, uh EVs aren't going away. Right. And uh they'll still be a significant market for them in a state like California.

Jim Fitzpatrick:

Yeah, yeah, I agree. So let's get an update on the uh the ACC2 mandate, um, referring to the California Air Resources Board's advanced clean cars uh two. Is that still tied up in legal challenges? What's your association's latest position on this issue?

Brian Maas:

Yeah, so uh we uh earlier this year launched uh what we called the calibrate campaign because we wanted the Air Resources Board to kind of recalibrate their rules and uh understanding that uh the current rule ACC2 as drafted by CARB wasn't going to be met. Uh CARB did that. They paused enforcement of the rule uh for the 2026 model year, which is what we'd asked them to do. Of course, the federal government passed the Congressional Review Act resolutions taking away CARB's waiver authority. California and a few other states turned around and sued. Um that case is uh currently proceeding through the courts. I think most prognosticators think that it's gonna be a difficult case for California to win. Uh the other significant development is today uh the heavy-duty truck uh manufacturers are suing to get out from the clean truck partnership. And there's a hearing in federal court today um about that. And so hopefully we'll get some news about whether uh the heavy-duty truck um manufacturers and dealers can be relieved of complying with uh ACC2 going forward. So there's there's a lot going on um relative to ACC2. The governor once uh on the day they filed the lawsuit issued an executive order uh asking CARB to begin conversations about uh what the next version of an EV mandate looks like. Um they've already started having some workshops. Um there's a listening public comment uh with the waivers taken away. Uh there can't be any real action on those until uh there's a a new administration in Washington. Uh but uh carb is gonna do what they can uh to prepare for the EV transition. And our goal in our communications with them is it needs to be market-based and reflect uh the pace at which consumers are buying these cars.

Jim Fitzpatrick:

Right, right.

Brian Maas:

And if they do that and recalibrate kind of their original thinking, uh they'll get it right. We look forward to participating in that process.

Jim Fitzpatrick:

Yeah, that's great. That's great. Um, the Sony Honda situation, AFEELA, what what um what's the deal? What's the any updates on that that you can share?

Brian Maas:

Sure. So um as as your viewers probably know, we sued VW Scout um back in April. Yep. Uh and that case is proceeding uh through the courts um in federal district court in San Diego. Uh in August, we sued uh the Sony Honda uh uh joint venture along the same grounds, arguing that they're illegally competing uh with uh Honda and Acura dealers in California. Um that case was filed in LA Superior Court. Uh some initial responses uh were just filed by uh the defendants, and we're gonna respond to those in the next few weeks. So that case is a little bit uh behind the VW Scout case procedurally. Um and we expect that uh Sony Honda will resist our uh lawsuit. And uh our hope is that we can survive uh what are called demurs or motions to dismiss, and then get to a place where we're uh uh asking uh the judges in those respective cases to enjoin the companies from illegally competing with uh their franchisees.

Jim Fitzpatrick:

Gotcha. It would seem that, and I don't I'm not a lawyer and I don't play one on TV, but um it would seem to me that if the Volkswagen, if you win in the Volkswagen case, then then the Sony case is a is kind of a no-brainer for for this, right?

Brian Maas:

I mean the the arguments are very similar. There's some uh uh factual differences in terms of how the uh companies are organized, but the underlying underlying law is the same. Yeah a manufacturer that has franchisees can't compete against its franchisees directly or critically through an affiliate. And we argue that Scout is an affiliate of VW in that case, and we argue that um AFEELA, the Sony Honda partnership, is an affiliate of Honda.

Jim Fitzpatrick:

Yeah, and it is. That's our view. That's right. Walks like a duck, talks like a duck, right? It's a it's a it's a duck.

Brian Maas:

Well, and what's it what's interesting, and you know, these are public comments that have been made by uh VW executives in particular, acknowledging that Scout Scout is part of the VW family, and uh VW's investing five billion dollars in building a new plant in South Carolina. These are public statements that the company has made. So it's pretty hard to argue, in our view, uh that uh that is not right uh uh an affiliation.

Jim Fitzpatrick:

That's right. That's right. That's that's amazing that they're even trying. But uh so as we head towards the end of 2025, uh what what are the key issues you know that that you're gonna be focusing on there at the association, uh, even if you're if it you know going into 2026, what's on the what's on the agenda?

Brian Maas:

Yeah, I would say two things. One is um one of our main missions in addition to advocacy is compliance. So Governor Newsom signed a bill SB766. It's called the California Cars Act. And um this uh bill changes some of the processes for dealers in how they um advertise vehicles, uh their record keeping requirements, add some new prohibitions. Um they're gonna have to have a bunch of new forms to comply with this law. And uh the uh law enacted for the first time uh that we're aware of a three-day cooling off period for used cars priced at less than $50,000. So our dealers are gonna have to uh make sure that they're properly complying with that rule. And by the way, that applies to all used car dealers, whether it's a franchise new car dealer that sells used cars, independence, Carvana, CarMax, everybody's gonna have to comply with that. So uh the law takes effect next October. Um, but we do a series of new law seminars and webinars for our dealers, and we're gonna educate them about getting ready to comply with a significant uh change in statute. The other thing we're preparing for is uh we have a gubernatorial election in California next year. Uh Governor Newsom's termed out, and we have to uh select a new governor, and yeah, our our dealers are likely to be actively engaged in that process, uh trying to figure out who can uh be most responsive to our industry.

Jim Fitzpatrick:

So that three-day waiting period, that that's a stunner right there. I mean, I you know, I'm putting my car dealer hat on and thinking, you know, obviously it the the I think the law is uh maybe a federal law where if you sell a car at somebody's home or you sell any product at somebody's home, they always had a three-day write, you know, of uh to you know, kind of a cooling off. But but this is at at the dealership if they buy it.

Brian Maas:

This is at this is at the dealership. It doesn't matter whether it's sold remotely in your driveway or at the store. Um consumers have the option to return the car. Now there's all kinds of um restrictions on how they do that, including a restocking fee. So it's not a free rental for the weekend.

Jim Fitzpatrick:

Right.

Brian Maas:

Um we made sure we added those uh kind of belts and suspenders uh provisions. For sure. Uh but we already had a two-day right to purchase the ability to return the car. We've had that for 20 years. Okay. Um and many of our dealers already offer policies where they allow consumers to return cars uh over a few days or a week or what have you. So it's not gonna be significant a change.

Jim Fitzpatrick:

Okay.

Brian Maas:

Um it's the details though that matter, and that's our job to educate our dealers about what those details are going forward. But it is a first in the nation thing.

Jim Fitzpatrick:

I was gonna say uh let's hope we have a three-day return rate. Yeah, let's hope it's the last in the nation thing.

Brian Maas:

W ell, we'll see. As you know, Jim, we've talked many times on your show. That's right. Uh what starts in California tends to spread uh north and east. So um it's highly likely other states will be look uh looking at similar proposals.

Jim Fitzpatrick:

Hence the reason we need law more lawmakers that are either former dealers or at least friendly and empathetic to the automotive industry, which is one of the drivers in any economy in any state. And uh we we need more more people to

Brian Maas:

Well, that's one of the things we do, especially with election season coming up next year, is try and communicate with legislators about the significance of our industry. I mean, uh one out of every eight new cars sold in the United States, sold in California.

Jim Fitzpatrick:

Wow, one out of eight.

Brian Maas:

Um uh Orange County alone sells more cars than 25 states.

Jim Fitzpatrick:

Oh my gosh, that's incredible. What a market.

Brian Maas:

So yeah, it exactly. It's a huge market. Right. The sales tax revenue is massive. Yeah um I can't your viewers will appreciate uh the state and local government roughly get about 10% in sales tax on the sale of a new car. Wow. Every dealer would kill for a 10% margin on new cars.

Jim Fitzpatrick:

Oh my god, could you could you imagine? Wow. Um and and yet and yet dealerships are still being bought and sold in California. I've got friends of mine that and dealers, you you know many of them that they're either totally against doing business in California or they're totally for it, and they're like, I know, but with all of that that stuff to put up with, it's still an incredible place to do business, and you can make a lot of money in your stores.

Brian Maas:

Yeah, Lithia just announced this week they acquired three more stores in California, they've got over 50 in our state. Right. Uh, they're a publicly traded uh company. Yeah, many private groups are expanding in California. Yep, and it's a fantastic market to be an auto retailer. Yeah, no question. And notwithstanding the regulatory and compliance and legal challenges uh that happen here, uh the customer base, uh service opportunity.

Jim Fitzpatrick:

The economy is always strong, You know, y'all get out of it.

Brian Maas:

We're the we're the fifth largest economy in the world.

Jim Fitzpatrick:

Unbelievable.

Brian Maas:

The state of California. So, you know, you can poo-poo it, and I don't want to live here, and you know, um, there's too much regulation.

Jim Fitzpatrick:

But uh it's just an incredible place, isn't it? And by the way, you know, if if in the event one dealer has got to put up with all of those different regulations and taxes and everything, so do all the dealers. It's not like you're, you know, if you're a dealer, you're the only one that's got to pay that. So it it levels the playing field if you're a dealer in California. They they all have got to do it, right?

Brian Maas:

It does. And obviously, look, if you're a business person and you're saying, well, it'll be easier to operate in some other state than it is in California, perhaps, but you're not gonna have the potential customer base or throughput uh in your uh retail operations, service parts, etc., that you're gonna have at a California store. I mean, I was in Southern California yesterday, and you drive by these uh dealerships, they're just massive with dozens of service bays and what have you serving their clientele. That's right. And uh when you've got 40 million residents, most of whom have to drive someplace to do anything, right? That's an incredible market.

Jim Fitzpatrick:

It is no question about it. There they listen, if anybody is out there thinking about you know the California market or doing business in California, maybe you need to spend some time with Brian Maas. He can tell you the real deal out there because it's uh it's an incredible car market for sure. And thank God for people like Brian Maas that are fighting a good fight for California dealers out there and his team uh because you need you need him on your side for sure. And those California dealers, I know I know a number of them, are very grateful to have you and your team out there just because these things come up and you gotta have somebody at the table saying not so fast-

Brian Maas:

Thanks for the the kind words, Jim, and uh it's good timing because we're about to send out our membership uh uh dues. So hopefully the dealers in California watching uhrenew their membership.

Jim Fitzpatrick:

If there is a California franchise dealer right now that is not a member of your association, uh I the the person needs to have their their brain checked because with all that's going on out there, they absolutely need to be engaged. And uh we've talked about that before. You know, it's one thing to write a check, it's another to be truly engaged in what's happening out there. And the dealer community in California, obviously, how many dealers are there in California? New car dealers?

Brian Maas:

Okay, we have about 1400 rooftops.

Jim Fitzpatrick:

Right. That's a huge political muscle right there that can certainly influence lawmakers, right?

Brian Maas:

Yeah, the more the you know, the more they're engaged, yep. Um the more power we can reflect at the statehouse.

Jim Fitzpatrick:

That's right.

Brian Maas:

And uh, you know, the average dealer in California employs about 95 folks.

Jim Fitzpatrick:

Wow. Wow, that's fantastic.

Brian Maas:

Yeah. So, you know, we we employ almost 140,000 people statewide. Incredible. Um that's a huge impact. And uh, you know, we already talked about the sales tax. It's massive.

Jim Fitzpatrick:

No question. No question. Uh in fact, I uh you know I had an idea that if in the event that uh every Honda dealer or every Volkswagen dealer and Audi dealer and Porsche dealer just said, listen, we're not gonna order another car until we get approved, you know, the or or we do away with this notion that you're gonna sell directly to consumers and compete with us, you can that would probably never happen. But you could imagine if they if the dealers just turned off the orders across the board all of a sudden, you know, those two companies would come to the table real quick, right?

Brian Maas:

Yeah, we're not in a position to be urging boycotts, that's for sure. Um the impact of California's market is massive. Yeah. And especially for the two brands we've been talking about, yeah. Um Honda and uh VW, it's a it's a place they need to be. Oh, there's a quick thing.

Jim Fitzpatrick:

I think the largest comply with the law. That's right. I think the largest Honda dealer in the country is in California and has been for many years, right?

Brian Maas:

I mean they keep uh Yeah, that that is that's true. Yeah, uh I bel I believe it's Norm Reeves from the Cerritos Auto Mall. Yep. Um, they've been number one for a long time. Yeah, but we've got several cities. Oh, I know you can um Honda dealers up and down the state. So um yeah, it's it's it's a tough place to do business, but as I like to tell folks, if you can figure out how to do business in California, you can figure out how to do business anywhere.

Jim Fitzpatrick:

That's true. That's exactly right. That's right. If you can make it here, you can make it anywhere. Brian Maas, the president of the California New Car Dealers Association. Thank you so much for all the time you've given us. And any way that we can help you here uh at CBT News, let us know. But uh keep keep doing what you're doing. I know the dealers out there very much appreciate it.

Brian Maas:

Well, thank you, Jim. Really appreciate the opportunity. Thanks.