Scout Motors Faces Legal Challenge from Florida Dealers

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In Florida car dealers have raised a legal fight against Scout Motors over its plan to sell electric vehicles directly to consumers through an app.

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Scout Motors, being a part of Volkswagen, has already sold cars through dealers, as it is considered a "common entity" in Florida and is required to sell through dealerships.

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According to John Forehand, the dealer's lawyer, taking a deposit is similar to making a sale, and Scout has already received over 50,000 deposits.

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The company plans to hire 4,000 workers for its new factory in Blythewood, South Carolina with over $1 billion in state incentives.

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However, South Carolina’s laws also prohibit Scout from selling directly to residents. In defence, Scout Motors reveals its intention of simplifying car buying as easy as shopping online through apps, similar to Amazon shopping.

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South Carolina’s governor acknowledges the demand for direct purchases but also believes in safeguarding the dealerships.

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Scout plans to sell two types of electric vehicles– the Terra pickup truck and the Traveler SUV aiming to sell these vehicles for under $60,000.

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In case Scout fails to overcome these legal issues it may have to sell their cars through other states where direct sales are considered to be legal.

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This shows how the way of buying cars has been changing with time, yet the existing laws and business practices make this difficult.

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