- Scout’s direct-to-consumer model bypasses traditional VW dealerships, frustrating dealers and sparking potential legal challenges nationwide.
- Established as an independent company, Scout avoids state franchise laws that would otherwise require dealership involvement.
- The new Terra and Traveler are expected to begin production in the U.S. in 2027, with prices for both models starting at under $60,000.
VW dealerships in the United States hoping to get a piece of the action with the new Scout Terra pickup and Traveler SUV are out of luck. The revived brand has confirmed that these models will be sold directly to customers, bypassing the traditional dealership network.
For the past few years, VW’s leadership has been debating the best way to market vehicles from its American-based startup. Dealerships had suspected as early as May 2022 that Scout might adopt a direct sales model, well before the new models were officially unveiled. VW offered them no assurances that they’d be included in the sales process, leaving many dealers bracing for disappointment.
Read: These Are The New Scout Terra Truck And Traveler SUV
While speaking about the new Terra and Traveler at the presentation, Scout chief executive Scott Keogh confirmed that the company will indeed adopt a direct-to-consumer sales model.
Dealerships Prepare for a Legal Battle
Unsurprisingly, this hasn’t gone down well with existing VW dealers. Backed by the National Automobile Dealers Association and the Automotive Trade Association Executives, they’re reportedly gearing up to pursue legal action in an attempt to force Scout to reconsider its direct-to-consumer strategy, Auto News reports.
“Assuming they take this other path, let’s face it, there’s going to be challenges and problems for them virtually everywhere across the country,” said John Devlin, the 2024 chairman of the Automotive Trade Association Executives and CEO of the Pennsylvania Automotive Association. “My counterparts around the country are not just going to roll over.”
Scout’s Independence Gives It Flexibility
The problem for VW dealers is that Scout has been established as an independent company, a move that clears the way for a direct-to-consumer model without conflicting with VW’s franchise dealer network.
“Because of the way the franchise laws are in many states, if this were to be a Volkswagen company, it would be forced to not compete against Volkswagen dealerships,” Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, told Auto News. “But as a standalone company, they are working to get around requiring franchise dealers, period, to carry the Scouts.”
Scout Motors is looking to establish a one-to-one relationship with its customers, directly offering reservations, sales, delivery, and servicing. It adds shoppers will know exactly what they’re paying for with “full price transparency,” and says “vehicle purchase transactions will be completed in minutes.”
Interested buyers will be able to see Terra and Traveler models at dedicated retail spaces across the US. Test drives will also be offered at these sites. Scout Workshops are also being established but the firm notes approximately 80% of repair types can be completed outside of a Scout Workshop, “whether in a driveway or while adventuring.”
Reservations Open, Production Planned for 2027
Scout has already started accepting reservations for the two models, requiring a $100 reservation fee, which is fully refundable. Prices for both the Traveler and Terra will start at under $60,000 before incentives, and production will begin at the Scout Motors Production Center near Columbia, South Carolina, in 2027.
Battery-electric and range-extender powertrains will be offered. Fully electric models will use two motors, featuring an 800-volt electrical architecture, and offering up to 350 miles (563 km) of range. A gas range extender with a small engine designed to recharge the high-voltage battery is also in the works. This model will have a range of more than 500 miles (805 km).
