👩‍⚖️ Florida Dealers to Scout Motors

The Gist

Scout Motors, the Volkswagen-backed EV brand, is facing a lawsuit from Florida Audi and VW dealers who say its direct-to-consumer model breaks state laws. The issue? Scout’s $100 deposits are considered sales under Florida law, and since VW owns over 30% of Scout, dealers argue it should play by the same rules. Meanwhile, Scout insists its approach is best for customers. With NADA backing the dealers and other automakers watching closely, this battle could shape the future of direct sales. Stay tuned—this one’s far from over.

What's the Deal?

A group of Florida Volkswagen and Audi dealers have filed a lawsuit against Scout Motors, the Volkswagen-owned EV startup, asserting that its direct-to-consumer sales model conflicts with Florida’s dealership laws. The dealers argue that Scout is already operating outside the rules by accepting $100 deposits from potential buyers before its first vehicles hit the road. The lawsuit, filed in Miami-Dade County, seeks to ensure that existing state laws are upheld.

Why the Concern?

Franchised dealers have long played a crucial role in serving customers and ensuring compliance with regulations that protect both buyers and sellers. Florida law considers a deposit as a sale, which raises questions about how Scout’s preorder system aligns with existing legal frameworks.

John Forehand, the dealers’ attorney, explains:

The lawsuit also asserts that because Volkswagen owns more than 30% of Scout, the two companies are legally connected—meaning Scout should follow the same dealership laws as VW itself.

Scout’s Position

Scout has maintained confidence in its approach. While declining to comment directly on the lawsuit, VP Cody Thacker previously stated:

The Broader Industry Context

• Tesla, Rivian, and Lucid all use direct-to-consumer models, but they do so without franchised dealerships in their corporate structures.

• Similar challenges are arising elsewhere. Honda and Sony’s Afeela brand are also facing pushback from dealer groups over direct-sales plans.

• NADA is standing firm. The National Automobile Dealers Association continues to advocate for the franchise model, emphasizing its benefits for both consumers and automakers. In a January statement, NADA Chairman Gary Gilchrist reaffirmed the importance of dealers, stating, “Franchised dealers provide unmatched value in sales and service, ensuring the best possible customer experience.”

What’s Next?

The lawsuit aims to clarify how Scout can operate within Florida’s legal framework. If the court sides with the dealers, Scout may need to adjust its approach or work with state lawmakers on a solution that aligns with dealership regulations.

Bottom Line: Dealers remain a vital part of the auto industry, ensuring customer support, service, and a seamless buying experience. As this situation unfolds, the outcome will shape how new automakers integrate into well-established retail models.

Sources:

• Car and Driver “Volkswagen, Audi Dealers Sue Scout Motors over Sales Model

• TechCrunch “Scout Motors sued over plan to sell EVs direct to consumers”

• NADA Chairman Gary Gilchrist – January 2025 Letter to Directors and ATAEs

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