Volkswagen’s Direct Sales Model for Scout Motors Faces Pushback from U.S. Auto Dealers

Volkswagen’s Scout Motors is adopting a direct sales model to sell its electric vehicles, bypassing traditional dealerships. While this strategy mirrors Tesla’s approach, it has drawn opposition from the National Automobile Dealers Association, which vows to challenge the move in courts and statehouses across the country.

Scout Motors’ Direct Sales Model Promises Pricing Transparency but Faces Opposition from U.S. Auto Dealers

Volkswagen's Scout Motors is endeavoring to enter the electric vehicle market by implementing a sales strategy that has been highly successful for industry leaders like Tesla. Scout announced on October 24 that it plans to replace its conventional dealer network with a direct sales model.

Scout would be directly selling and servicing customer vehicles with this sales model. According to a report by CNBC, the organization is committed to maintaining complete transparency regarding vehicle pricing. Scout's decision to implement a direct sales model is understandable; however, it also elicited the ire of organizations that represent U.S. auto dealers.

Volkswagen’s Scout Motors Plans 100 Retail Centers by 2027 Amid Dealer Pushback on Direct Sales Model

The National Automobile Dealers Association (NADA) announced on October 25 that they intend to contest Volkswagen's decision to sell Scout's vehicles directly to consumers. The dealer’s association has stated it will “challenge this and all attempts to sell directly in courthouses and statehouses across the country.”

Volkswagen's decision to "attempt to sell Scout vehicles direct to consumers and compete with its U.S. dealer partners is disappointing and misguided," according to NADA CEO Mike Stanton, will be challenged.

Scott Keogh, the CEO of Scout Motors, stated that the brand intends to establish approximately thirty-two retail centers in the United States when Traveler and Terra are introduced in 2027. The number of retail centers is anticipated to increase to 100. Keogh observed, "I believe it is imperative to maintain control over your customer, margin, and operational excellence in unstable environments in the future."

According to Teslarati, Scout intends to manufacture up to 200,000 Travelers and Terras annually from its South Carolina facility, which is currently under construction and will commence in 2027. In addition to hybrids with a range extender, the Scout Traveler SUV and the Scout Terra pickup truck will be available as all-electric vehicles.