Renderings of Scout Motors’ proposed Experience Center, to be located in Blythewood. (Provided by Scout Motors)
COLUMBIA — When automaker Scout Motors’ assembly plant in Blythewood is fully operational, some 200,000 electric and plug-in hybrid vehicles are expected to roll off the manufacturing line annually.
But if a state law remains in place, South Carolinians will have to travel outside the state to buy them — even after the state spent $1.3 billion in taxpayer dollars to lure in the company.
That’s because Scout Motors plans to sell the vehicles it makes directly — a sales model similar to Tesla — rather than going through a network of dealerships. South Carolina does not allow direct sales.
To change the law, the company faces an uphill battle and staunch opposition from the state’s roughly 300 car dealerships.
Scout construction workers in hard hats and blaze orange vests spilled out of the legislative hearing room Wednesday and into the hallway as the automaker sought to make its case.
After taking an hour of testimony from representatives of Scout and Tesla, auto dealers and a couple members of the public, a House panel adjourned debate — not killing the bill outright but putting it on ice in its debut public hearing.
“I think it’s very clear a lot of work needs to be done on this for both sides,” said Rep. Mark Smith.
The Daniel Island Republican, who is both the bill’s main sponsor and chairman of the subcommittee that heard testimony Wednesday, said legislators are leaving it up to the two groups to work out a compromise both can live with.
“I think we made it clear we’re not going to pick winners and losers,” Smith said. “That decision needs to be made by them.”
The legislation allows any electric vehicle maker that does not or has not had dealerships in the state in the past decade to sell directly to customers.
Dealers argue this undercuts their business. Scout said it gives customers the option to buy electric vehicle brands, such as Scout, Tesla, Rivian and Lucid, not currently sold in South Carolina because of its direct sales law.
Rep. Carl Anderson, D-Georgetown, said he didn’t think it was fair for Scout to receive state incentives, “and we’re going to boot our dealers out.”
And Rep. Chris Wooten, R-Lexington, suggested the state was trading the 4,000 new jobs Scout has promised to bring to Blythewood for 18,000 jobs at auto dealerships in the state.
But brands with existing dealerships — such as BMW, Volvo, Chevrolet, Ford, Cadillac, Hyundai and Honda — will continue to sell through their franchised dealers, meaning no dealerships will be driven out of business. They just won’t get any new business selling Scouts or other similar brands.
South Carolina is one of 19 states that have a total ban on direct sales, according to the Electrification Coalition, an electric vehicle advocacy group. Ten others only allow direct sales on a limited basis, similar to what Scout is seeking.
“In all the states and all the countries around the world where direct sales are permitted, franchise dealers continue to thrive,” said Cody Thacker, Scout’s vice president of growth.
South Carolina dealers would rather see the state’s law remain as is.
Marc White, a Volkswagen dealer in Greenville, told House members he was excited when Scout Motors announced in 2023 it was coming to South Carolina. He’d been waiting for a truck option to offer to his customers, and he saw that opportunity with Scout’s Terra.
White said he emailed a Scout executive he knew that same day to tell the executive he had a plot of land along Interstate 85 where he was ready to build a dealership to sell Scout’s vehicles when they start production in 2027.
Scout, a Volkswagen subsidiary, ultimately decided to go in a different direction.
The automaker plans to open 100 locations across the United States and Canada to sell and service the cars themselves.
If allowed, in Blythewood, that could include a showroom and factory tours, as well as an off-road driving course for people to try out the vehicles.
But Sims Floyd, head of the S.C. Automobile Dealers Association, said Scout knew or should have known the rules before they built here.
Dealers already sell other vehicles that fall directly under the VW umbrella, such as Porsche and Audi brands.
“I think they can certainly handle two more,” Floyd said. “There’s not a problem here. This is a choice issue for VW.”
Car dealers also suggested Scout and other direct-sales brands would not offer the same level of service as individual dealerships.
But Alan Buck, of Columbia, said his family owns four electric vehicles — three Teslas and a Chevy Bolt — and it’s his experience that they do. For his Teslas, he’s had a mobile service crew come to his home to rotate his tires or update the cars software. For bigger issues, he’s forced to travel over the border to Charlotte, the nearest Tesla store to his house.
Buck said his experience with Tesla has actually been better than his experience with the dealership where his daughter bought her Chevrolet.
“If it doesn’t work, consumers vote with their wallets, and they won’t choose that option,” he said. “They’ll go to a franchise dealership.”
But it would be nice to have the choice closer to home, Buck said.
Scout executives see the crack left in the door by legislators as an invitation to keep pushing for a change.
Tesla tried in 2019 but didn’t have the benefit of a massive assembly plant under construction 20 miles north of the Statehouse.
“It’s now a public issue, and we can have an open and frank conversation,” Thacker said.
In addition to the legislative fight in South Carolina, Scout is also facing legal challenges in Florida. Dealers there filed a lawsuit arguing Volkswagen’s 30% ownership share in Scout is enough to make it ineligible for the direct-sales exception the state allows for others, such as Tesla.
