Volkswagen’s Scout Motors unveils its first EVs, plans for plug-in hybrids

NASHVILLE, Tenn. — Volkswagen-Backed Scout Motors unveiled its first electric vehicles on Thursday and announced plans for the brand to expand its lineup to include an emerging plug-in hybrid electric vehicle in addition to EV models.

Scout, which was an American car brand from 1961 to 1980, was expected to exclusively offer EVs in an effort for the German company to increase its presence in the US However, slower than expected adoption of EVs and higher costs led to the change. Of course it also includes extended-range electric vehicles, or EREVs.

“Since we’re a fast-moving startup, we can pivot,” Scout CEO Scott Keogh, the longtime auto executive who heads VW’s US operations, told CNBC. “The pivot we made a few months ago in offering a range extender was a smart play.”

EREVs are basically a plug-in hybrid electric vehicle. It combines EV motors with battery cells, as well as an internal combustion engine to power the vehicle’s electrical components when the battery loses its power. The engine actually acts as a generator to power the EV components when needed.

Keogh said Scout added EREVs to better protect the brand from any market volatility amid lower-than-expected consumer demand for EVs.

“We think electrification is the future. The range extender positions it as an EV vehicle, so it introduces people to electrification, yet it has a very smart, let’s say, ‘backup system,'” he said during an interview on Thursday. “It will drive like an EV.”

He said Scout has no plans to offer a traditional, non-electric car with only an internal combustion engine.

The company’s first vehicles – a full-size truck and a large SUV – will account for about 40% of the lucrative US sales market.

Keogh said the company aims to be profitable within the first full calendar year after production of the vehicles, which will be built at a $2 billion plant under construction in South Carolina.

“If you look at these profit pools, these two areas, from this full-size pickup truck to this full-size SUV … these are the largest profit pools in the world,” Keogh said.

Making a profit at that time would be quite successful, as current EV startups such as Rivian Automotive again Lucid Group they lose tens of thousands of dollars on each car they produce after several years.

Meanwhile, Keogh said the software deal announced between VW and Rivian will not affect Scout’s performance. He described the $5 billion software deal, which includes the creation of a joint venture, as an “exciting opportunity” for Scout.

“It’s good for scale. It’s good for technology. It’s good for everything,” Keogh said.

Scout’s South Carolina plant is slated to have a production capacity of 200,000 vehicles. The Scout expects to use batteries – the most expensive part of an electric vehicle – from a battery manufacturer for VW’s Canadian business.

The company opened bookings for the cars on Thursday night on its website. Scout plans to sell cars directly to consumers instead of using a traditional dealer network like VW does in the US.

The first two Scout vehicles will be the Traveler SUV and the Terra pickup truck, which are scheduled to arrive in 2027.

The company revealed “production-purpose concept vehicles” — meaning they’re expected to be the same vehicles that go on sale — Thursday outside Nashville, Tennessee.

Both the Traveler and Terra are expected to start between $50,000 and $60,000 with available trims, according to Scout. Keogh said prices for EREVs are expected to be in that range as well. He declined to say whether they would cost more or less than other electric brands.

The Traveler SUV is expected to cover two-thirds of the company’s starting price, Keogh said.

EREV vehicles will have a range of more than 500 miles, according to the company, compared to 300 miles of range for all-electric models.

The Traveler and Terra designs are modern versions of the earlier Scout vehicles. They feature the same design features but without, without the style. The interior of the cars features large horizontal screens and soft touch devices.

VW acquired the Scout trademark and name following the company’s $3.7 billion global acquisition of Navistar, the successor to Scout’s original owner International Harvester, in 2021.

The all-electric Scout cars are meant to climb the 100% mark and accelerate from 0-60 mph in 3.5 seconds and provide nearly 1,000 lb.-ft. of torque, the company says.

Scout said that these vehicles will use the North American Charging Standard, an 800-volt architecture with up to 350-kilowatt power, and will be able to charge bi-directionally that will allow the vehicle to work as a generator.

The SUV is expected to compete with traditional SUVs from Jeep and Ford Bronco as well Toyota The Land Cruiser. It’s bigger than Jeep’s popular Wrangler, which is currently available as a plug-in hybrid electric vehicle.

The truck is a full-size van – a segment currently owned by Ford, General Motors again Stellantis’ Ram brand. But the pickup market in which the Scout will compete remains an evolving market.

Automakers like GM and Ford rushed to release all-electric pickup trucks earlier this decade to compete with the first few EVs, many of which never existed, and Tesla. Stellantis is expected to release full electric and EREV pickups next year.

But after rushing the cars to the market, sales dropped. Similar to the EV industry as a whole, supercars went from paying premium prices to being heavily incentivized.

In total, the market for electric “trucks”, including SUVs, is estimated at 58,000 vehicles sold in the first half of this year, according to figures from Motor Intelligence. That’s less than 1% of the estimated 7.9 million new cars sold in the US during that period, but a 35% increase in the quarter from the first to the second, according to the data.

Keogh believes Scout can differentiate itself in the market with its products, low prices and brand appeal. Additional Scout products are expected to follow in the coming years, Keogh said.

“Can we consider some point in the future to measure the floor? Absolutely,” he said. “You want to throw the arrow in the best place first. And I think we did that between these two cars.”