A group of Florida car dealers has filed a lawsuit against Scout Motors, a subsidiary of the Volkswagen Group, over its plan to sell vehicles directly to consumers, bypassing traditional dealerships. The lawsuit, filed by nearly two dozen Audi and VW dealers, alleges that Scout's direct-to-consumer sales model violates Florida law, which prohibits automakers from selling vehicles directly to consumers.
The dealers claim that Scout's acceptance of $100 deposits from interested customers constitutes a sale, which is illegal under Florida law. "Florida has a clear definition of the word 'sell' and Scout Motors is actively selling in violation of state law," said John Forehand, an attorney representing the dealers. The lawsuit seeks a court injunction to block Scout from selling vehicles directly to Florida residents.
Scout Motors, which unveiled its electric truck and SUV last October, plans to begin production in 2027. The company has not yet sold any vehicles, but the dealers argue that its business model is unlawful. Scout's decision to bypass dealerships has been met with resistance from the automotive industry, which has traditionally relied on dealerships to sell vehicles.
The lawsuit highlights the ongoing battle between automakers and dealerships over the future of car sales. Dealers have long maintained that their business model is essential to the industry, while some companies, like Tesla, Rivian, and Polestar, have found ways to circumvent dealerships and sell directly to consumers. Scout's decision to follow a direct-to-consumer sales model has sparked controversy, particularly given its affiliation with the Volkswagen Group.
The lawsuit also raises questions about the role of dealerships in the electric vehicle (EV) market. As the industry shifts towards EVs, dealerships may need to adapt to new business models. Scout's decision to bypass dealerships could be seen as a threat to the traditional dealership model, which has been a cornerstone of the automotive industry for decades.
Scout Motors has declined to comment on the lawsuit, instead pointing to previous statements made by Cody Thacker, VP for Growth, who emphasized the company's commitment to a direct sales model. The outcome of the lawsuit could have significant implications for the future of car sales and the role of dealerships in the industry.
The lawsuit is the latest development in the ongoing battle between automakers and dealerships over the future of car sales. As the industry continues to evolve, it remains to be seen how dealerships will adapt to new business models and whether direct-to-consumer sales will become the norm.