Volkswagen’s (VOW.DE) brand Scout Motors uses its US roots with an EV twist.
Scout Motors, named for the spunky off-roader built by the now-defunct International Harvester, will build its all-electric adventure vehicles at a new $2 billion facility in South Carolina. The plant will eventually employ 4,000 people and have an annual capacity to produce 200,000 electric vehicles per year when operational. Scout Motors says production will begin in 2026 and teased images of two of its upcoming vehicles.
Scott Keogh, CEO of Scout Motors, who formerly ran Volkswagen USA, said South Carolina’s natural resources, including plentiful water and energy, and a highly skilled workforce make it a prime choice. It doesn’t hurt that President Biden’s EV expansion funding from the IRA (Inflation Reduction Act) makes US manufacturing so much more attractive.
“I think the IRA plays a role in overall investment in America,” Keogh said in an interview with Yahoo Finance. “We honestly think this is a once-in-a-lifetime opportunity, but certainly the IRA is doing a lot to boost investment across America.”
Scout Motors EV design teaser image
Among the incentives for manufacturers to build electric vehicles and batteries in the US, the IRA offers tax credits to consumers if those vehicles and batteries are assembled in North America, in addition to upcoming requirements that critical minerals from those batteries be domestically sourced.
While Scout Motors’ upcoming electric vehicles are aimed at adventure and leisure consumers, Keogh believes the market is larger than just these buyers. “[Pickups and SUVs] are the two largest win pools in America — so those win pools are huge, they’re over 50% — so it’s going to be a big opportunity,” he said.
Scout Motors EV design teaser image
And the brand will try to learn from another iconic American brand – Tesla.
“[Tesla’s] much done well. We can learn a lot. We want to use these insights, not a debate,” says Keogh when asked about the main EV player in the market. However, Scout Motors can not only benefit from Tesla’s advantages such as clean-sheet design and no legacy costs, but also from Volkswagen’s access to capital and extensive talent resources.
The story goes on
“I think, especially for Scout, this gives us the chance to take over an iconic American brand, to take over the power and the backing of the Volkswagen Group and to act like a start-up, to move faster, with less legacy, less bureaucracy, and to act quickly and leverage capital markets and partnerships,” says Keogh, noting that it could play in an area with the best of both worlds.
According to Keogh, the two upcoming Scout models will be unveiled next year, with production beginning in 2026. Scout had limited focus group screenings of the vehicles in California and Texas, and the feedback was some of the “best results we’ve had in clinics.” had, period,” he said.
Unsurprisingly, Keogh is optimistic about Scout Motors’ progress, but he said the numbers don’t lie when you look at the market opportunity. And he believes there is room to create something original in this space.
“Our goal is not to create a niche brand. Our goal is to create the next iconic American brand like Levi’s, Apple and other companies [like that],” he says.
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Pras Subramanian is a reporter for Yahoo Finance. you can follow him Twitter and further Instagram.
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