COLUMBIA, S.C. (AP) — Legislation enabling Volkswagen-backed Scout Motors to directly sell its electric SUVs in South Carolina, where they will be manufactured, has hit a roadblock due to strong opposition from traditional car dealers. A House subcommittee convened this week for a scheduled meeting, during which they heard one hour of testimony from Scout and its supporters, as well as from dealers and opponents of direct sales. Following the testimonies, the subcommittee decided to table the bill, leaving it in a state of uncertainty unlikely to be resolved before the end of the legislative session in May.
Virginia-based Scout has been actively advocating for the General Assembly to allow South Carolinians to purchase cars directly through its app, offering services such as repairs, updates, and upgrades typically handled by dealers. In response, auto dealers have argued that they provide competitive pricing and personalized services, emphasizing their longstanding presence in local communities and the effectiveness of the dealer model over the years.
South Carolina is among the roughly two dozen states that prohibit manufacturers from selling vehicles directly to consumers, mandating that new cars must be bought through authorized dealerships. The brief meeting of the subcommittee on Wednesday drew the attention of Republican Governor Henry McMaster, who urged a more comprehensive examination of Scout’s request, given the substantial investment the company has made in building a major manufacturing facility in Blythewood near Columbia. The state has provided over $1 billion in incentives to Scout for the plant, which is set to commence vehicle production in 2027.
Governor McMaster remarked on Thursday, “On a bill involving a reputable company that has made significant investments in South Carolina, creating 4,000 high-wage jobs… we owe them the courtesy of thorough deliberation, allowing all voices to be heard before a decision is made.” A multitude of construction workers and auto dealers, along with their employees, attended the Statehouse hearing in support or opposition to Scout’s proposal, prompting the need for an overflow room to accommodate all participants.
Advocates for Scout Motors emphasized the importance of consumer choice and modernization, questioning why cars should be exempt from the online purchasing trend observed in other industries. Cody Thacker, Scout’s Vice President of Growth, emphasized the company’s plans to generate employment and contribute significantly to South Carolina’s economy. Conversely, auto dealers argued that buying a car involves complexities beyond a simple online purchase, including taxes, registration, and the need for test drives to ensure customer satisfaction.
Marc White, a Volkswagen dealer from Greenville, expressed his willingness to sell Scout vehicles at his dealership but received no response. He emphasized his concerns about potential competition from a company receiving substantial governmental support while threatening established family businesses like his own. Sims Floyd, executive vice president of the South Carolina Automobile Dealers Association, highlighted the state’s financial investment in Scout as a key point of contention.
The state’s generous offerings have sparked controversy among some individuals who argue that it may have been excessive. Floyd stated, “The 47 dealers here with me, along with those in the overflow room, have put in the hard work to establish their businesses from the ground up. They started from nothing, without seeking financial assistance from the government or having any expectations of such aid. They dutifully fulfill their tax obligations.” Scout has affirmed its commitment to manufacturing vehicles in South Carolina regardless of the outcome of the direct sales situation. Furthermore, the company is determined to continue advocating for legislative changes not only for its own benefit but also for fellow electric vehicle manufacturers such as Tesla and Rivian.
