Angry Florida Dealers Sue Scout Over Direct Sales Plan

Scout’s plan to sell its cars directly to consumers is already facing hurdles. A group of Volkswagen and Audi dealers in Florida has filed a lawsuit against Scout, alleging the automaker is already violating the state’s dealer franchise laws, despite not having made any sales. That might not matter in Florida, however. 

According to the filing, state law classifies deposits as a sale. Scout has already accepted over 50,000 deposits for its Terra pickup truck and Traveler SUV. The complaint also alleges that Scout is a “common entity” of Volkswagen of America, which supposedly prohibits the revived brand from establishing an independent direct-to-consumer sales model.

The lawsuit claims the state should prevent Scout from accepting deposits and prevent it from operating in the state. It’ll be up to a judge to decide if Scout is violating the state’s law. Florida allows Tesla and Rivian to sell directly to consumers, but unlike Scout they lack a parent brand with franchised dealers in the state.

Scout has faced threats of lawsuits from dealers in other states. In late December, the California New Car Dealers Association sent a cease-and-desist letter to Scout and VW, claiming the two violated a new California law that prevents direct-to-consumer sales. 

Photo by: Scout Motors

Dealer franchise laws aren’t easy to overcome. Each state has its own rules and regulations on how manufacturers can sell cars to consumers, with many preventing direct-to-consumer sales. This leaves new and established automakers facing a patchwork of legal quagmires.

In South Carolina, where Scout is building its factory, it can’t sell directly to consumers. But legislators recently introduced a bipartisan bill that would allow it. Scout introduced the Terra truck and Traveler SUV in October of last year. 

Motor1 has reached out to Scout for comment on the new lawsuit. We’ll update the story if we hear back.