Volkswagen’s (VOW.DE) Scout Motors brand is capitalizing on its U.S. roots, with an EV twist.
Scout Motors, named after the spunky off-roader built by now defunct International Harvester, will build its all-electric adventure vehicles from a new $2 billion plant located in South Carolina. The plant will eventually employ 4,000 workers and have an annual capacity to produce 200,000 EVs a year by the time it is up and running. Scout Motors says production will start in 2026 and teased images of two of its upcoming vehicles.
Scout Motors CEO Scott Keogh, who used to run Volkswagen USA, said South Carolina was a top choice because of its natural resources including abundant water and energy and a highly-skilled workforce. It doesn’t hurt that President Biden’s EV buildout funding stemming from the IRA (Inflation Reduction Act) makes U.S. manufacturing that much more attractive.
“I think the IRA plays to overall investment in America,” Keogh said in an interview with Yahoo Finance. “We think this is honestly a chance of a lifetime, but certainly the IRA is doing a lot to fuel investment across America.”
Among incentives for manufacturers to build EVs and batteries in the U.S., the IRA offers consumers tax credits if those vehicles and batteries are assembled in North America, in addition to upcoming requirements that critical minerals from those batteries come from domestic sources.
While Scout Motors’ upcoming EVs are aimed at the adventure and recreational consumer, Keogh believes the market is bigger than just those buyers. “[Pickups and SUVs] are the two largest profit pools in America — so these profit pools are massive, they make up over 50% — so it’s going to be a big opportunity,” he said.
And the brand will look to learn from another iconic American brand —Tesla.
“[Tesla’s] done a lot of things well. There’s a lot we can learn. We want to take advantage of those learnings, no debate,” Keogh says when asked about the key EV player in the market. However, Scout Motors is able to not only learn from Tesla’s advantages like clean sheet design and no legacy costs, but also Volkswagen’s access to capital and deep talent resources.
“I think specifically for Scout, what this gives a us chance to do is take an iconic American brand, take the power and the backing of the Volkswagen Group and act like a start-up, move faster, less legacy cost, less bureaucracy, and move fast and take advantage of capital markets and partnerships,” Keogh says, noting it might play in a space with the best of both worlds.
Keogh says the two upcoming Scout models will have product unveils next year, with production starting in 2026. Scout has had limited screenings of the vehicles with focus groups in California and Texas, and the feedback was some of the “best results that we’ve ever had in clinics, period,” he said.
Not surprisingly Keogh is bullish on Scout Motors’ progress, but he said the numbers don’t lie when you look at the market opportunity. And he believes there is space 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, other companies [like that],” he says.
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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Source: https://finance.yahoo.com/news/scout-motors-wants-to-build-the-next-iconic-brand-in-the-us–and-the-ira-is-helping-201959689.html