Scout Motors, forging ahead as EV growth slows, breaks ground on S.C. plant

BLYTHEWOOD, S.C. — Electric vehicle adoption may be slowing in the United States, prompting some automakers to delay or curtail output, but upstart Scout Motors is forging full speed ahead.

The Volkswagen Group unit, taking another step toward an ambitious goal of entering the U.S. market as an independent, EV-only light-truck brand, broke ground Thursday on a $2 billion Scout Motors Production Center here.

Volkswagen Group is resurrecting Scout with a U.S.-tailored SUV and pickup to tap a market increasingly dominated by light trucks and, more notably, highly profitable off-roaders.

Jeep, Ram, Ford, Chevrolet and GMC, with some of the industry's most loyal owners, have ruled the American off-road and work truck landscape for decades, and now Bronco, Hummer and Land Cruiser are back on the field, joined by upstarts such as Rivian, Ineos and Lucid with its new Gravity.

At the same time, as growth in EV sales slows, many automakers, including General Motors, Ford and Tesla, are dialing back on near-term output.

Roughly 40 percent of EV manufacturing capacity in the U.S. was utilized in 2023, AutoForecast Solutions Inc. estimates, and that number is expected to rise to about 46 percent this year. With new EV plants coming on line but not expected to be fully utilized for years, the rate of utilization should reach 60 percent by the end of the decade, said Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions. But getting above that will require quicker acceptance of EVs than is anticipated, Fiorani added.

Many consumers are also balking at the high price of EVs and Scout is actively exploring ways to procure low-cost battery options to keep pricing in check, without trading away range.

Scout, in a bid for core, mass-market U.S. consumers, is targeting a starting price of around $50,000 for the SUV. The average price of a new light vehicle in the U.S. is about $48,000, while average EV prices hover around $60,000, Edmunds says.

“We’re in this startup position and we’re able to pivot," Scout CEO Scott Keogh told Bloomberg. “We want to be dramatically more competitive on price to get into the mainstream."

Keogh said the batteries used by one VW Group product, the VW ID4, won't work for Scout vehicles.

VW Group's in-house battery subsidiary, PowerCo, is building its first North American battery cell manufacturing plant in St. Thomas, Ontario, and the automaker is establishing a regional supply chain to build EVs for Canada, the U.S. and Mexico.

Keogh, speaking with a small group of journalists on Thursday, said PowerCo "certainly offers opportunites and we'll announce when we're ready."

Plans for Scout's new assembly plant, which is being built on a large wooded tract once owned by two local farming families, call for production to begin by late 2026. The Blythewood factory will have annual capacity of more than 200,000 vehicles. Scout has said it will eventually employ 4,000 workers.

The factory, about 20 miles north of Columbia, South Carolina's capital, joins an expanding roster of manufacturer and supplier plants in the Palmetto State. BMW, Volvo and Mercedes-Benz each operate assembly plants in South Carolina.

In a nod to the long-dormant Scout name, which boasts a rich and colorful role in U.S. automotive history, a convoy of original Scout vehicles drove from Fort Wayne, Ind., where International Harvester built one of the industry's first SUVs, to Blythewood for the Thursday ceremony. Scout also transported a brick from the former Fort Wayne factory to the Blythewood site.

Keogh said in December that the initial vehicles, an SUV and a pickup, will be unveiled in the third quarter. The former head of Volkswagen Group of America and Audi of America told Automotive News at the time that Scout will launch the SUV first, followed by the pickup.

Scout's first two models are being designed and engineered on a new platform that could be utilized by other Volkswagen Group brands, Keogh said. "What we are doing here is relaunching an American icon," he said at Thursday's ceremony.

While Volkswagen has a history of being the "people's car," the automaker's off-road-capable products have never fully connected with buyers outside of Europe, Fiorani said, posing a challenge in targeting, for one, the American Jeep brand.

"The hope is that Scout devotees will line up to purchase the SUVs reborn with a modern electric drivetrain," he said.

The groundbreaking in South Carolina follows Scout's decision to set up a core R&D center in metro Detroit and bring in a number of key hires. Scout appointed a chief technical officer in November, hired a chief production officer in August and named veteran Stellantis designer Chris Benjamin its chief design officer in May.

Christian Vollmer, a member of Volkswagen Group's extended executive committee for production and logistics, said Scout Motors has been freed to tailor the SUV and pickup precisely for U.S. customers.

"It starts as a standalone electric platform and goes all the way to the great design, which will be really 'Scout,'" Vollmer said Thursday, promising customers will be delighted with the rugged SUV and pickup.

Scout will provide Volkswagen Group with vehicles that VW dealers in the U.S. have long coveted.

Keogh has in the past declined to say how Scout plans to sell and service the vehicles, noting the brand is focused on engineering and building the products first.

Charlie Hall, chairman of the Volkswagen National Dealer Advisory Council, told Automotive News at the NADA Show in Las Vegas this month that Scout was not brought up at the German brand's make meeting.

"It's been consistently communicated that it's its own separate brand," said Hall, president of Hall Imports in Brookfield, Wis.

David Phillips and Bloomberg contributed to this report.