Scout Motors CEO explains why they don't use any car dealers

The CEO of Scout Motors, a Volkswagen brand that sells EV trucks, believes that a ‘dealerless’ model is the way to go.

Scout has a direct-to-consumer approach – and it’s for a very specific reason.

This approach is not unheard of, but still relatively uncommon.

However, there’s one brand in particular that pioneered it – and it definitely worked out.

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Why Scout doesn’t want dealers

Scout Motors is an American brand that sells EV trucks and SUVs.

It is affiliated with Volkswagen Group but still operates independently.

At IAA Munich, Scout CEO Scott Keogh reiterated that the company doesn’t want dealers and that the direct-sale model is the best option for EV makers.

As reported by InsideEVs, Keogh told journalists and media people at a press conference during the show that the direct-sale model is the way to go, especially for EV trucks.

“I’m quite clear on this front. This is the right strategy,” he said.

Keogh said that’s because the brand wants to ‘own’ a direct relationship with the customer, and Scout is allowed to do this precisely because they are fully independent from Volkswagen.

This strategy was first pioneered by Tesla, and other brands – including Rivian and Lucid – are doing the same thing.

Tesla doesn’t really have dealers in the conventional sense of the word; it only has ‘Tesla Stores’.

And those are a marketing tool more than anything else.

Considering the Model Y was the best-selling car in the world in 2023 and 2024, clearly, this strategy is paying off.

A market anomaly

There’s a huge discrepancy between the US model and the business model in Europe.

In the US, there’s the MSRP, which is the manufacturer’s suggested retail price, and there’s the actual price tag.

The keyword is ‘suggested’, because dealers are free to apply markups if they want.

As a result, coveted car models are hardly ever available at MSRP.

The Chevy Corvette C8 (with the exception of the Z06) is a classic case in point.

Technically, it starts at around $70,000, but good luck finding it for less than $100,000.

By contrast, in Europe, dealers cannot do that.

So, translated, in the US, you’re sometimes begging the dealer to sell you the car at MSRP without any markups, while in Europe, the dealer is begging you to buy it at MSRP without any discounts.

Obviously, that doesn’t apply to every single vehicle available.

Some cars sell well without discounts or incentives, and other cars are indeed available at MSRP.

But it is indeed a market anomaly.

And that’s the main reason why other brands might follow Tesla’s and Scout’s example.