Scout Motors' effort to directly sell its electric SUVs where they'll make them stalls

[February 14, 2025]  By JEFFREY COLLINS

COLUMBIA, S.C. (AP) — Legislation to let Volkswagen-backed Scout Motors sell its electric SUVs directly to people in South Carolina, where the vehicles will be built, has stalled after fierce opposition from traditional automobile dealers.

A House subcommittee held a carefully prepared meeting this week, hearing just an hour of testimony from Scout and its supporters as well as dealers and opponents of direct sales. Then they adjourned debate on the bill, leaving it in a limbo unlikely to be resolved before the legislative session ends in May.

Virginia-based Scout has made a big push to get the General Assembly to let South Carolina residents buy a car on its app, then use it to handle everything from repairs to updates to upgrades that typically are handled by dealers.

Auto dealers responded by saying they provide competition with car prices and service. By living and working in local communities, they say they are more responsive to problems and that the dealer structure has worked for decades.

South Carolina is one of about two dozen states that ban manufacturers from selling vehicles directly to consumers and instead require that new autos be purchased through a dealer.

The short subcommittee meeting on Wednesday caught the attention of Republican Gov. Henry McMaster, who said the Republican-dominated General Assembly owes Scout a more thorough vetting of its request since the company is building a massive manufacturing plant in Blythewood just north of Columbia. The state is giving Scout more than $1 billion in incentives for the plant, which expects to roll the first vehicle off the line in 2027.

“On a bill with a good company that has invested billions of dollars in South Carolina hiring to begin with 4,000 high paying jobs ... we ought to give them the courtesy of having a full debate, let everybody have their say then take a vote," McMaster said Thursday.

Dozens of construction workers in hard hats and fluorescent orange and yellow vests came to the Statehouse Wednesday to support Scout. Dozens of auto dealers and their employees in business casual also showed up. Officials had to open an overflow room for everyone who wanted to attend the hearing.

Scout Motors shows off one of its older gasoline powered models at a ceremony to celebrate the start of construction of its new electric SUV, Feb. 15, 2024, in Blythewood, S.C. (AP Photo/Jeffrey Collins, File)

Scout Motors supporters said it is a simple matter of choice. Why in a world where everything from pants to jewelry to laundry detergent can be bought online should cars remain an exception?

“If you believe in liberty, you support this bill. If you believe in consumer freedom you support this bill. If you believe in deregulation and economic prosperity you also support this bill,” said Scout Vice President of Growth Cody Thacker, who pointed out his company planned to create 10,000 jobs and put $4.2 billion into South Carolina's economy.

Auto dealers said buying a car isn't as simple as buying a shirt. There are taxes, registration, regulations and complications if someone wants a test drive or isn't satisfied with what they bought.

Marc White is a Volkswagen dealer in Greenville. He told the subcommittee he offered to sell Scout vehicles at his business but never heard back.

“The last thing I would ever want is for the state to give Scout more than a billion dollars and then have them competing against my own family business that we built without any government assistance,” White said.

Sims Floyd, executive vice president of the South Carolina Automobile Dealers Association, zeroed in on the state money given to Scout, which has become a point of contention with some people who think the state offered too much.

“The 47 dealers behind me and in the overflow room have built their businesses from scratch," Floyd said. “They built it from zero. They never asked for money from the government. They never expected money from the government. They pay their taxes faithfully.”

Scout has said it will build its vehicles in South Carolina no matter what happens with direct sales and will keep pushing to change the law for itself and other electric vehicle makers like Tesla and Rivian.

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