Volkswagen Group is radically overhauling its business strategy to save money and stay afloat, and it may axe its Tesla-inspired direct-to-consumer retail model for EVs in major European markets.
In a press release, VW said that selling EVs through direct-to-consumer models while also selling ICE vehicles via traditional retail operations was too complex in Europe’s weak auto market, pointing to what it says is the slow pace at which consumers are buying EVs.
“Given challenging framework conditions, we will have to reevaluate if our current agency model for all-electric vehicles delivers the best possible customer experience,” Marco Schubert, the VW Group board member responsible for sales, said in a statement. Still, he added that direct-to-consumer sales will remain a “long-term target” for the automaker.
Tesla’s revolutionary direct-to-consumer model, which bypasses traditional dealerships in favor of selling cars directly through its own network of stores and online, has completely disrupted the way in which cars are sold in Europe, with many legacy automakers trying their best to follow suit in a highly regulated auto market. In VW’s case, its EVs can be purchased via dealers, and the dealer earns a fixed, lower margin without needing to take on marketing costs or carrying costs for inventory.
Audi-Q8-e-tron-Dakar
The possible retail revamp includes VW brand vehicles but also Audi, Skoda, and VW commercial vehicles in France, Germany, Poland, Spain, and the UK.
In 2020, VW introduced its direct-sales model for EVs, and the results from its review are expected to be released in March of next year. VWs’s Cupra brand, however, will continue to sells its EV under the direct-to-consumer model, as will all VW vehicles sold in Ireland and Sweden, regardless of drivetrain.
This comes at a time when VW is radically restructuring its business to cut costs, and plans to close down three factories in Germany – the first time in the company’s 87-year history that it is closing factories on its home turf. The plan includes cutting tens of thousands of jobs and slashing pay for 10% of its remaining staff.
The brand is also seeking to streamline production and development processes, shaving off months on the development cycles of specific projects to help tighten the belt, reports Automotive News Europe.
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Tesla released its larger, six-seat Model Y L in China one week ago, and now we’re starting to get an idea of what it’s capable of from the earliest reviews.
Here at Electrek, we usually prefer to conduct our own reviews for cars, rather than reporting on the reviews of others. However, the Model Y L is out in China, and we’re not in China right now, so… this is what we get.
And, heck, we may not even ever get a chance to look at it in the US, given that Tesla CEO Elon Musk recently said that the Model Y L might never come to the US because of autonomy (huh?)… though frankly, that seems more of an effort for Tesla not to Osborne effect itself, causing consumers to delay purchases until the Y L comes out, when the company is already struggling with sales.
So, what are they saying about the new Model Y L in China? Well, there are a few points that seem to be coming together so far.
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Namely, even though the main feature of the new model is a third row with two seats, those seats seem rather compromised when it comes to holding adults.
A number of Chinese media have visited Tesla showrooms to try out the seats in the new model, and while they can squeeze into the back, it’s a little bit tight for a grown adult.
One of the earliest showroom visits said that “the third row cannot be the new selling point of Model Y” (article in Chinese; quote was machine-translated).
The reviewer is 170cm, or 5’7″ tall, which is not all that tall, particularly from a Western perspective. While he had reasonable knee space in the back (where foot room is somewhat cramped due to the floor being about 10cm/4in higher in the third row), he was concerned about his head being quite close to the glass when sitting up, potentially causing a strike if riding on a bumpy road.
Also, while this test happened inside a showroom, having a window right over your head could be uncomfortable on a sunny day, even through Tesla’s UV- and infrared-resistant glass.
The apparent lack of rear seat headroom is notable given that the one real visual difference between the Y and Y L is that the rear looks much taller in the Y L – and yet, the headroom is still iffy for even a not-particularly-tall adult.
Other reviews concur that while knee room seems okay in the third row, the raised floor means little to no thigh support for adult passengers, and little headroom as well.
That said, reviews state that the seats are nicer than in the original Model Y, with more comfortable seat cushions, adjustable headrests, extendable thigh cushions, 2nd row adjustable armrests, seat heaters for all three rows and ventilators for the first two, and air vents in each row.
So, it seems like the general consensus is that the third row will mostly be used in emergencies, or for kids, or for short trips, but that the car is nice for a family – as long as those kids aren’t too big. Though to be fair, that is the case with many third rows.
Rear trunk space seems… fine, but there’s only so much room you can expect when you’ve crammed another row into the vehicle. And both the second and third row fold down, with the third row offering a relatively flat floor when folded down, though the second row has gaps and bumps and does not offer a flat floor when folded.
For comparison, the Model Y L is 180mm, or about 7 inches, longer than the regular Model Y – and a seat is a lot longer than 7 inches, so something has to give. The rear trunk area still has Tesla’s traditional under-floor storage space, which seems quite ample, and the “frunk” area is also similarly deep to the Model Y.
When compared to direct competitors available in China, the competition tends to be larger and have more third row space. For example, the Onvo L90 is $8,000 cheaper but larger and more comfortable in the third row. The Model Y L is in fact the smallest vehicle among its direct competitors, which I actually admire Tesla for doing (cars are just too big). But this does make the vehicle feel like a bit of a compromise.
It’s also missing some of the newer features that Chinese consumers have gotten used to, like a fridge, large rear-seat TV or seat massagers. Which makes the Model Y L seem a little dated for the Chinese market – but compared to what the rest of the world is used to, it seems quite nice. Such is the pace of innovation driving the EV market in China right now, while we in the rest of the world actively try to send ourselves back to the stone age.
And yet, despite it comparing less favorably on features to its Chinese competitors, and comparing more favorably to those cars outside of China, Musk still claims it won’t come to the US. He’s justsofullofgoodideaslately.
Beyond the issue of third-row space, the first driving dynamic test we saw seems quite positive. Youtube channel GeekLaii goes over the tests, where the car did quite well despite being fully loaded with adults, adding 500kg (1,102lbs) worth of human cargo.
The car did well in this impromptu “moose test,” a type of test that analyzes a vehicle’s ability to swerve around a sudden obstacle in the road at high speed. Despite being filled with people and having quite a lot of body sway, the car remained stable. This was likely helped by the Model Y L’s relatively low weight compared to the competition, which helps driving dynamics significantly.
And even after the sway, the car settled itself relatively well, likely due to the addition of CDC active dampers to the suspension system (this is adjustable through the touchscreen, with “balance” and “rear seat comfort” settings). The new suspension system also gave improved speed bump comfort.
Although, the car’s longer length, and lack of rear-wheel steering (which the Cybertruck has, for example), mean quite a large turning circle. And braking performance was good, but got worse when the car was loaded with people (as you’d expect).
All in all, it seems like the vehicle is a competent step forward with a lot of improvements, but that it might fall short when compared to the rest of the market in China, particularly in terms of third-row usability. But it still maintains the good driving dynamics that someone would expect from a Tesla.
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Car dealers, who have long been a roadblock in the rollout of EVs in the US, are continuing with their old tricks and filing lawsuits against new spinoff EV brands, like Sony Honda’s Afeela and VW’s Scout, which had hoped to extricate themselves from the dealership model.
Ever since the beginning of the EV revolution in the US, car dealerships have been a thorn in the side of progress.
Across the US, there are laws requiring automakers to sell cars through franchised dealerships. These laws originate from the early days of the automotive industry, when they also allowed car companies to scale their sales networks much more rapidly in the early days of the car boom in the US. And after setting up these franchises, it wouldn’t be particularly fair for automakers to be able to come in and undercut them, so the cat is sort of out of the bag at this point.
In their most optimistic portrayal, they also ensure that repairs are readily available across the country, that competition for sales helps keep prices down, and that manufacturers can’t throw their weight around and unfairly control the market.
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But as is the case with most legislatively mandated middle-men, it hasn’t all been rosy. Every American knows that the car purchasing process is time consuming, hostile, full of tricks and of dealership personnel who have much more interest in earning a commission than in providing accurate information about the model you’ve come in asking questions about. Car dealers are routinely ranked as among the least-trusted profession in America (with the second-lowest positive trust rating, behind lobbyists, in this year’s Gallup survey).
Worse, when it comes to EVs, car dealers are often ignorant or outright hostile, and this pattern has been consistent (though slowly improving) for the more than a decade since EVs have been available to the US car buying public. Many EV purchasers have permanently sworn off dealers as a result of the comparatively better experience they’ve gotten when purchasing vehicles from one of the EV startups like, Tesla, Rivian or Lucid.
But the dealer lobby has long caused difficulty for these startups. Despite each of these being new companies with no franchised dealers, certain states have laws disallowing them from selling car on their own. They need to seek loopholes or ship in cars from out of state in order to sell cars over the internet, and dealerships keep lobbying to change laws to make it more difficult for new companies. There is a long and complicated history of these disputes.
And just like every objectively good thing in today’s world, the EV/dealership battle has taken on a political angle, with the party that’s only interested in doing bad things unsurprisingly choosing to do bad things in this case as well. (And, oddly enough, the bad CEO of the largest EV company in America gave hundreds of millions of dollars in bribes to the party which wants to eliminate EVs – and which is allied with the Tesla’s most significant enemy over its history: the auto dealers).
But the dealerships’ opposition doesn’t just end at startup EV brands – they’re now voicing their opposition to EVs from large manufacturers’ new spinoff brands, and the opposition might end up being even more fervent in this case.
Dealers take legal action against spinoff EV brands
Recently, both Honda and VW have come out with spinoff EV brands which they hope will help them attract the EV consumer who has realized the benefits of internet purchasing and isn’t interested in going back to a dealership. These brands, Sony Honda’s Afeela and VW’s Scout, have both announced they’ll be building their own sales networks.
CNCDA’s complaint says that not only does the decision to go direct to consumer violate the trust between Honda and its dealers, but that it also violates a new 2024 California law, which was sponsored by the CNCDA and opposed by Honda, which CNCDA says stops automakers “from using affiliated brands to compete with their own franchised dealers.” CNCDA says that the Sony Honda Mobility joint venture should count as an affiliated brand of Honda.
The argument may be stronger in this case than it is against the startups. EV startups never had a franchised dealer network to begin with, so they aren’t unfairly competing against dealerships that they had previously granted a license to.
But that’s not the case for VW and Honda. Both of these car companies have franchised dealers, and now a subsidiary of theirs, or a joint venture, or whatever-you-want-to-call-it, wants to compete against those dealers.
Well, sort of, anyway. They wouldn’t be selling the same car as those other dealers, as the Afeela and Scout would only be available in direct-to-consumer form, and presumably other VW and Honda vehicles will still exist and be sold at dealerships.
We’ll have to see if that argument works in front of the courts. But it looks like we’re in for many more years of the same sort of legal wrangling we’ve seen from dealerships – instead of any sort of effort to improve the EV buying experience on their part.
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Is Toyota’s new 2026 C-HR the affordable electric SUV we’ve been waiting for? The revamped EV SUV was spotted with a stylish new look while filming a commercial.
Toyota’s new C-HR EV SUV is launching in 2026
Toyota’s compact crossover SUV is returning in all-electric form, and it’s already apparently a movie star. We got our first look at the 2026 C-HR+ in March after Toyota unveiled a trio of new electric SUVs set to launch in Europe.
The US model, revealed a few months later, looks nearly identical to the EU version, but drops the “+” at the end of the name.
You can see right off the bat that it’s an immediate upgrade from the gas-powered C-HR, which was discontinued in 2022 in favor of the more efficient Corolla Cross Hybrid.
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The new 2026 C-HR looks sharp, featuring Toyota’s updated design, with elements like its “hammerhead front end” borrowed from the new Crown and Corolla models. In a way, it almost looks like the Prius, but as a higher-riding crossover SUV.
2026 Toyota C-HR electric SUV (Source: Toyota)
It looks like Toyota’s new EV SUV is already drawing attention. The 2026 C-HR was spotted on set in Austin, Texas, filming a commercial.
The image from Kindelauto is one of the closest looks at the new electric SUV so far, revealing the new front-end design.
At 177.9″ long, 73.6″ wide, and 63.8″ tall, the new C-HR is smaller than bZ, Toyota’s other electric SUV (formerly known as the bZ4X). It’s about the size of the Kia Niro EV (174″ long, 72″ wide, and 62″ tall).
The new crossover SUV will be available with all-electric (EV), Hybrid, Plug-in Hybrid (PHEV), and Fuel Cell powertrains.
2026 Toyota C-HR electric SUV (Source: Toyota)
Powered by a 74.7 kWh battery, Toyota anticipates the 2026 C-HR EV will offer a range of up to 290 miles. It will come with standard AWD with an electric motor at the front and rear eAxles.
It will also feature a built-in NACS port, enabling you to recharge at Tesla Superchargers. Toyota said the electric SUV can recharge from 10% to 80% in about 30 minutes.
2026 Toyota C-HR electric SUV interior (Source: Toyota)
Inside, the updated SUV includes a “high-tech cabin that is stylish and functional.” A 14″ infotainment system sits at the center with Toyota’s Audio Multimedia System and Wireless Apple CarPlay and Android Auto support.
Toyota’s new EV SUV will begin arriving at dealerships in 2026. Although prices have yet to be revealed, given the outgoing model started at under $25,000, the electric version is expected to launch with a low starting price tag of around $30,000.
Last week, we learned the 2026 Toyota bZ will be one of the few EVs in the US with prices starting under $35,000. Since the C-HR is smaller, it could be even more affordable.
What do you think of the new C-HR? Do you like Toyota’s new style? Drop us a comment below and let us know your thoughts.
Source: Kindelauto
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