Scout Motors, the electric vehicle brand spun out of Volkswagen, is facing a legal challenge from a group of Volkswagen and Audi dealerships over its plan to sell vehicles directly to consumers, bypassing traditional dealerships.
The lawsuit, filed this week in Miami-Dade County’s Eleventh Judicial Circuit Court, seeks to block Scout’s direct-to-consumer retail model, which has become a contentious issue in the automotive industry. Dealerships, particularly those affiliated with established car manufacturers, have historically opposed the direct sales model, notably against EV startups like Tesla, which has faced similar legal hurdles.
See also: Scout Confirms Extended-Range Electric Vehicles with Over 500-Mile Range
Scout Motors, which is not expected to begin producing electric vehicles (EVs) until 2027, announced in October 2024 that it would adopt a direct sales approach similar to Teslaās, promoting transparent pricing and a streamlined purchasing experience. The decision has prompted criticism from industry groups, including the National Automobile Dealers Association (NADA). āThe decision by VW to attempt to sell Scout vehicles direct to consumers and compete with its U.S. dealer partners is disappointing and misguided, and it will be challenged,ā said NADA CEO Mike Stanton.
The California New Car Dealers Association also issued a cease-and-desist letter in December 2024, claiming that the direct sales model violated state laws. Similar efforts are underway in Florida, where dealership groups are seeking to prevent Scout from bypassing the traditional retail model.
See also: Scout Motors to Adopt Rivianās Zonal Software Architecture for Upcoming EVs
Scout Motors made its comeback in October 2024 after a 44-year hiatus, unveiling two new production-intent concepts: the Traveler SUV and the Terra truck. Both vehicles are set to offer up to 350 miles of electric range, with an optional extended-range system, the “Harvester,” utilizing a gas-powered generator to extend the range to over 500 miles.
Source: Autonews