Scout Motors, backed by automotive giant Volkswagen, is steering into the electric SUV market with ambitious plans to redefine customer interaction. The company aims to revolutionize car buying through a streamlined app-based process that allows purchases in mere minutes, facilitating everything from repairs to updates. However, legislative hurdles in South Carolina, where Scout is investing billions in a new facility, may impede this vision.
Across the nation, purchasing vehicles remains one of the few transactions largely controlled by traditional dealerships, despite the growing prevalence of online shopping. Supporters of this dealership model argue that it provides a marketplace for price comparisons and ensures comprehensive vehicle ownership services, including financing, inspections, and test drives.
South Carolina, along with about twenty other states, mandates that all new car sales must be conducted via dealerships, prohibiting direct sales from manufacturers to consumers. This means that residents eager to own a Scout SUV may need to travel out-of-state for purchases or services, as manufacturers are also restricted from owning service centers within South Carolina.
Proponents of the traditional model argue that it supports local economies, as dealers are deeply rooted community businesses and significant contributors to local tax revenues. Republican Senator Larry Grooms of the South Carolina Senate Transportation Committee emphasizes the value of having local businesses accountable for their sales and customer service.
Scout Motors, however, is lobbying for change, not only for its operations but for the broader electric vehicle (EV) industry, including companies like Tesla and Rivian. The company is advocating for consumer choice, arguing that individuals should have the freedom to purchase vehicles directly from manufacturers without necessitating intermediaries. An opinion from the Attorney General’s Office back in 2000 also aligns with this perspective, questioning the necessity of middlemen in a supposedly free market.
Resisting the dealership-only model, Scout posits that such an approach could inflate car prices, undermining its mission to provide affordable EVs below $60,000. South Carolina Governor Henry McMaster has expressed a two-fold vision: protecting dealership interests while also enabling Scout to thrive through direct sales, recognizing the shifts in consumer expectations driven by the convenience of e-commerce.
Scout’s strategy includes utilizing its historical lineage and modern technological innovation to carve out its spot in the U.S. EV sector. The brand combines nostalgia for International Harvester’s original gasoline models with cutting-edge tech, prominently led by an app that centralizes the customization and purchasing process.
The company envisions offering buyers the luxury of selecting model specifications, handling the typically lengthy tasks such as financing and titling in minutes, and ultimately delivering customized SUVs directly to customers' doorsteps. Scout's Vice President of Growth, Cody Thacker, highlights the remarkable potential of this approach to transform the vehicle buying experience.
Scout Motors' forthcoming plant in Blythewood, South Carolina, anticipated to employ up to 4,000 people, is central to this vision. The plant is slated to commence operations by 2027 with a production target of 200,000 vehicles annually. Additionally, the company plans to enhance the customer experience through a test-driving track adjacent to the plant, aiming to conclude purchases swiftly after potential buyers test-drive the vehicles.
While the state has pledged more than $1 billion in incentives to support Scout's establishment in Blythewood, the dealership law surfaced as a formidable challenge once the company began architecting its business model. Despite these obstacles, Scout remains confident in South Carolina’s workforce and economic conditions, and it is poised to forge ahead, even considering cross-state sales should the legislative landscape remain unchanged.