- The lawsuit disputes Scout’s claim that it will operate independently of the VW Group.
- Scout has fiercely defended its direct-to-consumer sales model in recent weeks.
- The brand’s two models will be manufactured at a purpose-built factory in South Carolina.
Scout Motors isn’t close to beginning production of the Terra and Traveler models, let alone bringing them to the market, but already, the company is facing a legal challenge for its proposed direct-to-consumer sales model. Soon after drawing the ire of dealers in California and South Carolina, Scout is now the subject of a lawsuit filed by several VW and Audi dealerships across Florida.
The lawsuit, filed on February 3, names dozens of Audi and VW dealerships across The Sunshine State, and alleges that Scout’s sales plans are unlawful. It takes specific aim at the EV brand’s reservation system where buyers can lock in an order for the SUV and pickup truck. According to the lawsuit, this violates state law.
Read: VW Dealers Are Furious, Scout Couldn’t Care Less
“Florida has a clear definition of the word ‘sell’ and Scout Motors is actively selling in violation of state law,” attorney John Forehand described. “If you take a buyer deposit in Florida, it’s the same as making a sale, and that’s simply not allowed.”
This lawsuit also takes issue with Scout’s structure, notes The Verge. The dealers describe Scout as not being an independent company, given that the Volkswagen Group owns it. However, Scout, and VW, continue to insist the brand will operate as an independent entity, and as such, it isn’t obligated to sell its vehicles through an established network of dealerships.
One of the lawyers involved in the suit notes that if a manufacturer owns 30% or more of a company in Florida, that firm is considered to be a “common” entity. He adds that the VW Group owns more than 30% of Scout, meaning it falls into this definition.
Scout Motors hasn’t commented on this new lawsuit. However, a spokesperson reiterated comments made by Scout’s VP for Growth, Cody Thacker, late last year, noting that a direct sales plan is best for the brand.
“Just as utilizing franchised dealers may be appropriate for some brands and their customers, utilizing a direct sales model best supports our customers and our strategic customer-first vision as we launch a new vehicle platform, a new production center, and a new retail network to bring the Scout Traveler SUV and Terra truck to market.”
