California VW Dealers Are Not Excited About Scout Selling Directly To Consumers

Scout has made plenty of noise this year, revealing two new EV models due in the next few years. While many people seem excited about the brand’s revival under VW, California car dealers aren’t so stoked. The state’s new-car dealer association demanded that Scout Motors and Volkswagen stop taking deposits for the vehicles, saying direct sales are prohibited in California.

The group sent a letter to VW and Scout, saying that their plan to sell vehicles directly to buyers “wrongfully cuts new and existing VW dealers out of an opportunity.” They also noted that the process violates California law. The dealers’ letter said that as a Volkswagen subsidiary, Scout’s decision to sell directly runs afoul of the state’s law that states automakers and affiliates can’t compete with their own franchised dealers. An amendment later changed the law to say that automakers can compete as long as the new vehicles are sold using the existing dealer network.

The resurrected Scout brand has been a hot topic since VW first announced its return in 2022. In late October, Scout opened the reservation books for the Terra pickup and Traveler SUV, which offer electric powertrains and range extenders in some configurations.

Scout’s sales model would join similar operations at Tesla and Rivian, the former of which is exempted from the amended law for some reason. As the state with the largest population and best weather, California is a vital market for Scout, but VW has a few options to sell there, including offering Scout vehicles at existing VW or Audi dealers.

[Images: Scout Motors]

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