How in the world is Scout Motors already facing trouble? The automaker hasn’t even sold a single SUV yet. Dealerships in Colorado are suing because they don’t think the vehicles count as electric vehicles for direct-to-consumer sales. 

Scout Motors is getting sued over direct-to-consumer sales 

It feels like Scout Motors is taking a common approach to the EV market. Like its future rivals, Tesla and Rivian, it wants to operate with direct-to-consumer sales. 

This cuts out the third-party dealer franchise system, despite being owned by Volkswagen. It seems like VW already has plenty of dealerships available for Scout truck and SUV sales. Also, this move allows the EVs to compete directly against gas-powered cars. 

However, as interest in EVs fades in America, many automakers like Ford and Ram are shifting away from building pure electric vehicles. 

There are dealer franchise laws that allow exemptions for electric vehicle-only brands to bypass the dealership system. However, a group of dealerships in Colorado may have discovered a loophole. 

According to Yahoo, a lawsuit claims that the Scout vehicles don’t qualify as electric-only vehicles. They are range extended electric vehicles (EREVs). 

This means that they have a small gasoline engine available to charge the battery in case electric chargers aren’t available. Therefore, they don’t qualify for direct-to-consumer sales. 

Scout argues that the vehicles do meet the definition of an EV as they don’t require gas to operate. But are they really hybrids instead? 

Volkswagen wants to bypass dealerships to avoid making Scout vehicles more expensive. It blames the premature death of the ID.Buzz in America on dealer markups. Scout Motors could be better off as an independent brand.