In the early 2010s, Tesla removed a few bricks from the dealer wall that separates automakers from consumers in the US market. Could that wall come down one day soon?
The retailer model, with its hobbyist salespeople doing their high ball, low ball, “let's see what we can do” dance, has become an anachronism since consumers became accustomed to shopping online. And by many accounts, dealerships are a major barrier to EV adoption—many dealers outside of California remain ignorant about EVs, despite education programs initiated by Chargeway and others, and dealers continue to lobby against pro-EV policies.
Now Scout Motors, the Volkswagen Group brand that builds rugged, off-road electric vehicles, has announced plans to sell its trucks directly to consumers when they launch in 2027, with transparent pricing, online orders and company stores. Retailer groups are already planning legal challenges.
Photos by John Voelcker
InsideEVs' Mack Hogan wrote that Volkswagen dealers are “furious” that the Scout plans to drop them from the picture, and say they've long wished VW would offer vehicles like this in the U.S. market (perhaps without electric powertrains). “Just to show these new cars that would fit well in the VW portfolio, is like rubbing salt in the wound here,” said the head of the National Auto Dealers Association Mike Stanton told Automotive News.
California dealers plan to sue, saying Scout competes with VW's own dealerships, a capital offense under the state's franchise laws. Scout argues that it is a separate company from VW. (Hmmm…could that be part of the reason why automakers set up subsidiaries to sell their EVs?)
Scout executives believe they will be able to fend off legal challenges. “We're very confident that we'll be successful,” Cody Thacker, Scout Motors' VP of Growth, told InsideEVs. “We think we're in the right position here, and it's never a bad place to promote consumer choice and consumer freedom in car buying.”
MORE: Scout Motors unveils EV Terra truck, Traveler SUV concepts, including Harvester range extender
The auto dealer groups' claims are “what you would expect from a lobbying company,” Thacker added. “That's what you would expect from a trade union. We do not believe there is any truth to the claims.”
“There's no doubt in my mind that if we can provide a transparent, seamless, fast and truly enjoyable buying process, that's what we're doing,” Scout CEO Scott Keogh told InsideEVs. “I think these things should be decided by American consumers and businesses should innovate and compete. I'll let the market speak.”
Legal battles will likely be fought on a state-by-state basis over the years (as is the case with Tesla's ongoing saga), and Mr. Hogan notes that Scout doesn't need to win in every state. Rivian and Tesla get around geographic restrictions by simply making sales documents in one location, then moving the car to another. Setting up service centers is a complicated matter, but Mr. Thacker believes Scout will be able to handle it. “Within five years of launch, we will have roofs on 100 homes in the United States and Canada,” he said. “All of these areas will overextend the utility infrastructure.”
Source: Inside EVs
