Tim Stevens
Fri, March 3, 2023
Scout Motors, the VW Group spinoff taking aim at the U.S. market with rugged all-electric vehicles, is deepening its investment with plans to build a $2 billion factory capable of producing 200,000 EVs a year in South Carolina.
There are a growing number of reasons for Scout Motors to keep the brand as red, white and blue as possible. And it's not just to market itself to U.S. consumers. There are actual incentives on the line thanks to the Inflation Reduction Act and likely some kind of incentives package from South Carolina's state government. The state government has not disclosed details on what incentives may be provided to Scout. However, South Carolina Gov. Henry McMaster has made it a priority to make the state an EV epicenter through an executive order signed in October 2022 that prioritizes building EV infrastructure, preparing the state workforce for advanced manufacturing jobs and organizing EV planning under a centralized state working group.
Scout Motors will build its factory in Blythewood about 20 miles north of Columbia, which will ultimately employ 4,000 people, on 1,600 acres right in the middle of the developing "battery belt." The plant itself will occupy 1,100 acres of that property.
Groundbreaking is expected to occur in mid-2023, according to the company.
Scout Motors EV teaser 2023
A teaser image of two Scout Motors vehicles, an all-electric truck and an SUV. Image Credits: Scout Motors
Scout revives a classic nameplate with funding and technology from VW Group. This factory, however, represents its independence from its parent company. From here, the EV brand will have to stand on its own four tires up against the Jeep Wrangler, Ford Bronco and Rivian R1S.
Scout Motors isn't going the contract manufacturing route despite rumors that the brand was going to partner with a company like Magna Steyr or Foxconn. Scout CEO Scott Keogh told TechCrunch that after due diligence the company decided to bring manufacturing in-house.
"Look, being a startup, we did our jobs," Keogh told TechCrunch in a recent interview, adding that the company evaluated every option, from taking a green-field approach and building a new factory to partnering with others and even taking over an existing factory.
"At the end of the day, where we landed is 'manufacturing is a core expertise'," he said. "We know how to do it quite well."
Manufacturing in the United States was always a priority, Keogh said, but the 2022 Inflation Reduction Act provided that extra incentive (literally) to commit to the idea of building a factory.
"We think it's important to manufacture in America, certainly without a doubt, the Inflation Reduction Act, combined with what the states are doing, make it a smart time to buy versus rent," Keogh said.
Scout will receive support from the South Carolina government. The incentives package was not disclosed Friday. Keogh said the decision to locate in the state came down to many factors, including an existing infrastructure for the automotive industry and what Keogh called an "extremely strong port."
The port of Charleston, which is about two hours from Columbia, is the eighth-largest in the United States and fastest growing, a strong incentive for an American brand with global roots and aspirations.
Keogh also praised the "beautiful bandwidth" of local talent at all levels thanks to local universities. "That's going to allow us to build a future oriented company that's loaded with engineering talent," he said.
Notably, Scout will have a valuable neighbor and promising player in the EV space: Redwood Materials. The Nevada-based battery materials and recycling startup recently announced its own $3.5 billion plan to create a battery recycling facility in Berkeley County, South Carolina.
"I think what they are doing is brilliant and exactly right," Keogh said when asked about this happy coincidence.
Though he declined to confirm any potential partnership between the two brands, battery recycling is very much on his mind, saying that in time he hopes for upwards of 50% of Scout's battery supply to come from recycled materials. "Yes, we will be doing that. Do we have a deal structured right now? Absolutely not. But fully that is the plan," he said.
For now, Scout Motors is focused on building its American-made, American-focused products by the end of 2026. An all-electric SUV will come first and a truck will follow a few months later. These vehicles will share VW components like motors and inverters but not whole platforms, meaning they'll have to blaze their own trail to market.
How Scout Motors plans to bring rugged, retro cred to the EV era
Tim Stevens
Fri, March 3, 2023
"We're operating out of everywhere," Scott Keogh said with a laugh in his first interview as CEO of Scout Motors, the American EV upstart spun out of VW Group.
While most established automotive players call the shots from sprawling, corporate palaces, Scout bases much of its operations -- at least for now -- out of a WeWork near Washington, D.C.
Scout Motors' base of operations will eventually "anchor" near the $2 billion factory in South Carolina that was announced Friday, but Keogh believes remote work will be key to Scout Motors' success. The company already has critical employees working remotely around the United States and overseas.
"I believe firmly that era is over," Keogh said of the classic days of centralized organizations. "I don't think it exists anymore in the spirit of Americans, in the spirit of the company."
Origins
Capturing the spirit of Americans is a big part of what Keogh hopes and plans to do with Scout Motors, an all-electric brand launched with a $100 million investment from Volkswagen that plans to start shipping its first vehicle, an off-road focused SUV priced around $40,000, by the end of 2026. Scout was the former consumer automotive brand of International Harvester, which ended production in 1980 in the wake of labor disputes and the 1979 energy crisis.
1971 SCOUT 800B COMANCHE WHS 8732
A 1971 Scout 800B Comanche. Image Credits: Scout Motors
The original International Harvester Scout was a go-anywhere, do-anything utility vehicle, following in the footsteps of the original Jeep but with a more practical, enclosed body five years before the Ford Bronco bolted onto the scene. "In our minds, Scout sort of planted the seed, and if you look at almost every SUV, they've basically stolen that name and done some modification of it," said Keogh, who then fired off familiar nameplates like Trailblazer, Pathfinder, Explorer and Discovery.
Those models may be derivative, but they have one significant advantage over Scout: They've all been in production at some point within the past 40 years. Scout, meanwhile, is in the difficult position of trying to honor the past while making up for nearly a half a century of lost time. If that weren't enough, Scout has to distance itself from Volkswagen, too.
Keogh used the phrase "clean slate" four times during our interview, in reference to everything from software to dealership presence. With its Volkswagen ties, Scout Motors seemingly has a distinct advantage over other EV startups in that it could theoretically piggyback into the hundreds of U.S. VW dealers. However, Keogh says, there are advantages to following the trail blazed by Tesla in defining a way for manufacturers to sell cars directly to consumers.
"We have not decided, but we're taking a long, hard look at it," Keogh said about online direct sales. Historically, he said, manufacturers dominated the scene, but lately the dealerships have been calling the shots, often at the expense of everyone else. "It's always been an industry that played more towards legislation, industrialization, networkization, as opposed to what's the best consumer experience," he said. "This is the differentiator: Awesome retail experience focused on the customer, focused on technology."
Launch target
Scout Motors will launch its first two EVs in quick succession starting in late 2026, Keogh confirmed.
First will be a small, off-road focused SUV that Keogh calls an RUV: a "rugged utility vehicle." The second is a larger truck, which will "lean a little bit more on-road" in terms of its driving characteristics. Details like range and power aren't yet set, but pricing for the RUV is meant to start in the $40,000 range, while the truck will be "a bit north of there."
Neither, though, will be lacking in off-road capability, a brand new focus for the Volkswagen Group.
Both vehicles will be built on a bespoke, body-on-frame platform of the sort historically used by the most capable off-road machines. Manufacturing will take place in the United States, at the company's newly announced factory in Columbia, South Carolina.
Scott Keogh Scout Motors
A battery partner has not been announced, but Keogh was adamant about structuring suppliers to take full advantage of the EV incentives offered by the Inflation Reduction Act, which has domestic production requirements.
Scout's new EV platform will share some components with other Volkswagen Group cars, items like HVAC components, motors and inverters. But that's where the similarities end. Scout Motors is aiming to offer driving character and capability unlike anything else under VW Group, a behemoth company that includes a long string of EV platforms. VW Group created the MEB that lies beneath the Volkswagen ID.4, its successor MEB+, the J1 Performance platform under both the Porsche Taycan and Audi E-Tron GT, and the upcoming PPE platform for the upcoming Porsche Macan EV.
In addition to a bespoke platform, Scout's cars will also take radically different approaches to software integration and the overall user experience. Some core aspects of the software will be provided by Cariad, the software arm of Volkswagen. Keogh said the base software architecture is in place. The user experience will be radically different, he added.
Keogh points to physical touchpoints as a main differentiator. VW's ID.4 has been panned by many for its over-reliance on touch surfaces, for example.
"We really want to keep a lot of the mechanical nature," Keogh said. "I think if you look at the American buyers, yes, they appreciate software, but they don't want software to be all-dominating. I think you'll see a lot more, let's say old-school physicality, but in a good way."
So no touchscreen-controlled vents à la the Tesla Model Y, then? "I can pretty much confirm yes," Keogh told me.
Unveils ahead
Scout's two models are set for unveiling in early 2024. The company has already had a limited screening at focus groups in California and Texas, where the prototype vehicles were stacked up against traditional offerings like Broncos and newer entries from Rivian. Keogh expected the concepts to do well among more EV-aware and friendly viewers in California, but even the feedback in Texas was strong. "We got some of the best results that we've ever had in clinics, period," he said.
And what about the Scout loyalists, who're still repping the brand at annual events like Harvester Homecoming? "In fairness, it runs the gamut," Keogh said of the feedback they received, with some finding the style a bit too progressive. But, Keogh says, they need to move the brand forward. "We would now be on the Scout 8," he said, if International Harvester had never stopped making the cars after the Scout II. "Certainly you would not want the Scout VIII to be like the Scout II."
For Keogh, the key to attracting customers is in the name. "It's a simple line that we've been using, but I think it works, this concept that the world does need more Scouts. Scouts can manifest themselves in things like hiking, climbing Everest, let's say the more extreme side of scouts, or they can be dramatically less extreme as well, to tailgating to someone who knows the latest ideas."
While Keogh is adamant that the new Scout will honor the past, it won't be a brand hung up on legacy like some of its gas-burning competition: "I don't want to make Scout a fossilized retro brand that says: 'Dear America, it's 1977. Again.'"
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