VW, Audi dealers are fighting for their right to sell you cars

Back in October 2024, German auto giant Volkswagen launched Scout, a retro-inspired off-road EV brand, after two long years of hype, development and anticipation.

The Scout, which gets its name from the legendary International Harvester Scout, differentiates itself from other electric runabouts that sell themselves as “tough,” like Tesla’s Cybertruck, by giving them an “old-school” feel, as well as features that make drivers feel at home on the most difficult off-road trails. 

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Additionally, Scout’s two EVs—the Traveler SUV and the Terra pickup— will come in range-extended variants called the “Harvester.” These models use a gas engine generator to boost their range from 350 electric miles to 500 miles. 

But while Scout attempts to get its base excited about a vehicle that will begin production in 2027, VW and Audi dealers are waging a fight against how it will sell its cars. 

The Scout Traveler SUV and Scout Terra pickup

Scout Motors

Stopping the Scout

As per Automotive News, a group of VW and Audi dealers in Florida have filed a lawsuit against Scout Motors, claiming that its direct-sales model for vehicle sales and reservation system violates laws meant to protect dealers in the state. 

The suit, which is the first to challenge Scout’s ability to do direct sales, also questions the brand’s independence from the Volkswagen Group and alleges that it isn’t a properly licensed manufacturer in the state. 

Some of Florida’s biggest auto dealers, including Morgan Auto Group, Braman Automotive, and Rick Case Automotive Group, are named as plaintiffs in the suit, filed on February 3 in Miami-Dade County Circuit Court. 

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Scout Motors’ direct-to-consumer retail model has been a key selling point of its brand. In a statement released during the brand’s launch back in October 2024, Scout emphasized that it wanted the car-buying and ownership experience to be as painless as possible for its customers.

“Scout Motors will establish a one-to-one relationship with its customers, rooted in trust and transparency, by selling and servicing Scout vehicles directly from Scout Motors. From reservations and vehicle sales to delivery and service, Scout Motors supports the consumer directly,” it said.

“From the start, customers will know what they are paying and can expect full price transparency. Vehicle purchase transactions will be completed in minutes. The company will create a simple, seamless experience for Scout customers across all touchpoints.” 

Though the brand has good intentions for its customers, selling directly to them eliminates one key establishment part of the car-buying hierarchy: dealers. 

The Scout Motors Traveler electric sport utility vehicle (SUV) concept during the 2025 CES event in Las Vegas, Nevada, US, on Wednesday, Jan. 8, 2025. 

Bloomberg/Getty Images

In the case of the Florida dealers, their lawyers question whether Scout is an independent brand or not.

John Forehand, one of the lawyers representing the dealers in the suit, argues that this isn’t the case. He says that the VW Group—the owners of the VW Group of America—owns or controls more than 30% of Scout Motors. Under Florida law, if an automaker owns more than 30% of any brand or entity, it’s considered a “common entity.”

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According to Richard Sox, another lawyer representing the Florida VW and Audi dealers, argues that other direct-sales brands like Tesla and Rivian are unaffected because they are fully independent, do not have any franchised dealers, and are not affiliated with an automaker with franchised dealers. 

Florida’s Motor Vehicle Dealer Act blocks common entities from selling directly to consumers. According to the suit, an automaker like Volkswagen or one of its common entities “may not compete with its franchised dealer network by offering any brand of new motor vehicle for sale to Florida consumers other than through a licensed dealer.”

Scout Motors began taking $100 refundable reservations for the Traveler SUV and Terra when it launched the brand back in October, however, Forehand argues that a reservation can be used to offset the purchase price of a future vehicle; which in essence, makes it a deposit.

“In Florida, taking a deposit is defined as conducting a sale,” Forehand told Automotive News.

The dealers in the suit, representing roughly 60-65% of VW dealerships in Florida, claim that Scout should be barred from accepting deposits for vehicles sold in the sunshine state and that the brand should be barred from doing business in Florida because it doesn’t have the proper manufacturer license.

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Volkswagen dealers have previously been very vocal about Scout’s retail model. 

In an April 2024 interview with Automotive News, Volkswagen dealer owner and Volkswagen National Dealer Advisory Council chairman Charlie Hall said dealers like himself would “beg for the opportunity” to display and sell Scout cars out of their showrooms.

On April 15, the Automotive Trade Association Executives published a full-page ad in the print edition of AutoNews that threatened legal action against Scout and VW.

In a previous statement to TheStreet in October 2024, a representative for Scout Motors defended its decision to pursue a direct-to-customer sales model and defended it as an independently operating brand from the rest of VW. 

“Scout Motors exists and operates independently of Volkswagen Group of America and its dealers, just as Scout Motors exists independently of all other manufacturers and their respective dealers,” Scout said. 

“Scout Motors does not have franchised dealers, now or in the past. Scout vehicles have never been sold through any brand, including the Volkswagen and Audi brands.”

TheStreet has reached out to Scout Motors for comment. 

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