- The company’s SUV and pickup truck models will be built at a $2 billion plant in South Carolina.
- Several politicians want dealer laws changed to promote consumer choice and market freedom.
- Scout Motors has vigorously defended its right to sell directly to consumers.
Soon after we reported that Scout Motors will be unable to sell its upcoming EVs directly to consumers in its home state South Carolina, a bill has been introduced in the South Carolina House of Representatives that could change this. It could also pave the way for several other car manufacturers to implement a direct-sales model, avoiding the need to establish a dealership network.
The bill aims to amend the South Carolina Code of Laws and has been sponsored by three Republicans and four Democrats, including Marvin ‘Mark’ Smith and Terry Alexander. It proposes to amend section 56-15-45 of the bill to allow car brands that own or operate a manufacturing plant and never had dealer franchise agreements to sell vehicles directly to customers. The bill says this will “promote consumer choice and market freedom.”
Read: South Carolina Gave Scout $1.3B, Yet Taxpayers Can’t Buy Its EVs In SC
Politicians supporting the legislation change note it would only apply to manufacturers who have not previously had dealership agreements in place and do not intend to impact the existing franchise dealer system.
Speaking with Auto News, executive vice president of the South Carolina Automobile Dealers Association, E. Sims Floyd Jr, said Scout just “wants to compete against the dealers,” adding, “the net of it is they want to change the law, there’s no middle ground there.”
Unsurprisingly, Scout is very supportive of the proposed law change.
“We envision a future where Scout vehicles are made by South Carolinians, for South Carolinians, purchased directly from Scout Motors by South Carolinians,” a spokesperson said. “Right now, outdated blanket government restrictions render that impossible. Ironically, and sadly, the people who build Scout vehicles won’t be able to buy them under current regulations.”
The legislation was introduced on January 16 and has been referred to the Committee on Labor, Commerce and Industry. The bi-partisan bill will need to pass the committee before it can be ratified and sent to the Governor, who must approve it before the laws can be changed.
Scout Is Determined To Go Direct
Scout Motors is following the lead of Tesla, Lucid, and others in attempting to sell its EVs directly to consumers in the US. These plans have generated plenty of controversy among current VW dealers, many of whom believe they’re entitled to sell Scout products, given it’s part of the VW Group. However, the general counsel of Scout, Neil Sitron, recently offered a strong rebuke against the California New Car Dealers Association which demanded that the carmaker drop its direct sales plan.
In the letter, Sitron said Volkswagen Group of America “is not authorized by Scout Motors to sell, and will not be selling or distributing, Scout-branded EVs in California or in any other state.” Scout also said it will vigorously defend itself should dealers act on their threats to take the matter to the courts.
Not having the ability to sell its vehicles in South Carolina would be particularly unfortunate for Scout as that’s where the Terra and Traveler will be built. South Carolina approved a $1.3 billion round of funding in 2023 to help Scout build a manufacturing site roughly 18 miles (29 km) north of Columbia.
