VW Dealers Face Off Against Direct Sales: Scout Issues Stark Warning

Scout Motors Fires Back at California Dealers’ Cease-and-Desist Letter
In a battle that’s heating up, electric vehicle (EV) brand Scout Motors is refusing to back down in the face of threats from California’s largest dealers association. The California New Car Dealers Association (CNCDA) sent a cease-and-desist letter to Scout, claiming that the brand’s direct-to-consumer (DTC) sales plan is unlawful and competitive with existing franchises.
February 2025: The Setting
Before Scout’s EVs even hit the market in 2027, the company has already received deposits for its Traveler SUV and Terra truck. The controversy began when CNCDA sent a letter to Scout, stating that the brand’s DTC model directly competes with existing franchises, violating California law.
The Bigger Picture
Tesla, another pioneer in the EV space, was able to bypass traditional dealerships due to its lack of legacy automaker ties. However, Scout, as part of the VW Group, is bound by different rules. While startups like Lucid and Rivian took advantage of the DTC loophole, CNCDA asserts that Scout’s independent status is non-existent.
Scout’s Response: We’re on Our Own
In a January 17 response to CNCDA’s cease-and-desist, Scout General Counsel Neil Sitron lashed out, "You are wrong." Sitron argued that Scout is entirely separate from Volkswagen Group of America (VWGoA), with no funding from the parent company for its South Carolina production plant. Sitron also stated that VWGoA dealerships have no right to Scout-branded vehicles.
Dealer Association Fights Back
The CNCDA swiftly reacted, reiterating its original points in a same-day response. "We are prepared to act if needed," quipped CNCDA President Brian Maas. The National Automobile Dealers Association (NADA) has also condemned Scout’s retail plans, with Outgoing NADA Chairman Gary Gilchrist threats to challenge the EV brand in courts across the country.
The Road Ahead
As the battle between Scout and dealers intensifies, the fate of its EVs hangs in the balance. While their arrival in 2027 remains a ways off, the controversy has already made headlines. Can Scout Motors successfully navigate these choppy waters, or will dealerships like CNCDA ultimately prevail? Only time will tell.