There’s much work to be done before Scout Motors can begin selling its battery-electric full-size Traveler SUV and Terra pickup truck, likely starting in 2028. The $2 billion assembly plant in Blythewood, South Carolina, remains under construction. But a crucial interchange connecting the plant to Interstate 77 won’t be finished until mid-2027.
Beyond logistics and signing off on details for the production vehicles, Scout management needs to sort out another vital question: how to complete sales transactions with customers, possibly including the 200,000 hand-raisers who have placed $100 deposits for a Terra or Traveler.
Angry Dealers Are Prevailing In Court
Scout has stirred up a hornet’s nest by trying to sell vehicles directly to consumers, bypassing the traditional franchised dealer network. Tesla, Rivian, and Lucid are among EV startups that can market directly to consumers because they had no existing independent franchise agreements.
But Scout is wholly owned by Volkswagen Group, which has about a thousand franchised dealers in the US. Automotive dealers in California have sued to stop Scout from selling directly to consumers. Late last week, a federal judge in California upheld the lawsuit by the California New Car Dealers Association and denied motions by Scout and VW Group to dismiss, according to Automotive News.
Will Scout Have To Sell Through Dealers After All?
It’s another legal setback that raises the question: Will Scout and the VW Group scrap direct-to-consumer sales? A Scout spokesperson told CarBuzz via email today that the automaker “will certainly never consider backing down from our commitment to selling directly to consumers. We are fulfilling our promises: our promise to bring back American manufacturing and hire 4,000 workers… We already have the state dealer licenses and regulatory alignment needed to execute our plan. The public reaction to our mission across America has been overwhelmingly positive.”
Scout Terra and Traveler and CEO Scott Keogh at Scout Motors Innovation Center in Michigan.Tom Murphy | CarBuzz | Valnet
But this is the second time this year that US District Chief Judge Cynthia Bashant has ruled in favor of California car dealers, denying similar motions from VW Group and Scout. The court is upholding a state law banning manufacturers from competing with their own franchised dealers, even indirectly through an affiliate, Automotive News reports.
Production Started For Validation Vehicles
In Blythewood, Scout says the plant roof is now complete and covering all 5 million square feet of production space and onsite supplier park; equipment is being installed and commissioned. “We have started producing initial validation vehicles,” a spokesperson told CarBuzz. “That effort will continue and mature into 2027.”
Scout Motors factory bodyshop robotics in Blythewood, South Carolina, August 2026Scout Motors
Blythewood is expected to produce up to 200,000 body-on-frame vehicles when the plant reaches full capacity. Scout is reiterating plans to deliver the first new Scouts to customers in 2028. “We intend to prioritize the Traveler extended-range EV as it represents the highest source of reservations,” a spokesperson told CarBuzz via email.
CarBuzz Insight – Why This Matters:
Despite the legal setbacks, Scout sounds fairly confident about its ability to proceed with direct sales to consumers. But if the California dealer association wins its case, what does Scout do then? Proceed with direct sales, despite federal court rulings? Perhaps California is the nation’s largest car market, but there are 49 other states with franchise laws, and the fight is sure to spill across multiple state borders.
Source: Scout Motors, Automotive News
