Sunita Somvanshi
Car dealers in Florida are taking Scout Motors to court over how it wants to sell electric vehicles. The company plans to skip traditional dealerships and sell directly to buyers through an app, much like ordering products online.
Florida car dealers say this isn’t legal. They point out that Scout Motors is part of Volkswagen, which already sells cars through dealers. In Florida, when Volkswagen Group owns more than 30% of Scout Motors, Scout is considered a “common entity” and must sell through dealers.
“Taking a deposit is the same as making a sale in Florida,” explains John Forehand, the dealers’ lawyer. Scout Motors has already secured over 50,000 deposits from people who want to buy their cars.
The company is building a factory in Blythewood, South Carolina, with over $1 billion in state incentives and plans to hire 4,000 workers. But there’s a catch—South Carolina’s laws don’t allow Scout to sell cars directly to residents.
Scout wants to make buying a car as easy as shopping online. Their Vice President of Growth, Cody Thacker, explains buyers could configure vehicles and complete paperwork through an app, making the process much faster than traditional dealership visits. The company also wants to build a test track where people can try cars and buy them on the spot.
Car dealers say their business model protects buyers. “Dealers live in these communities, pay taxes here, and send their kids to local schools,” says South Carolina Senator Larry Grooms. They worry direct sales could hurt local businesses and reduce competition.
South Carolina’s governor, Henry McMaster, sees both sides. “People want the freedom to buy things directly, like they do on Amazon,” he says. But he also wants to protect local dealers.
Similar Posts
Scout plans to sell two types of electric vehicles– the Terra pickup truck and the Traveler SUV. They aim to price these vehicles under $60,000. Like Tesla and Rivian, which already sell directly to consumers in some states, Scout wants to offer a different buying experience.
If Scouts can’t solve these legal issues, they might have to sell their cars through other states where direct sales are allowed. This approach could logically mean states with restrictive dealer laws might miss out on potential business opportunities and tax revenue.
The fight shows how car buying is changing. While many people want to buy cars online like other products, existing laws and business practices make this difficult. The outcome could change how all cars are sold in the future.
