Scout’s Launch Delayed to 2028 Amid Budget Overruns and Dealer Lawsuit

Another Bump in the Road

It seems like Scout Motors can’t catch a break. German newspaper Der Spiegel reports that the brand’s launch has been pushed back by another year. As such, Scout – Volkswagen’s revived American off-road brand – is now expected to begin production in 2028, reportedly due to technical hurdles and financial challenges.

The delay follows earlier reports that Scout’s South Carolina assembly plant has gone over budget. The project was initially estimated at around $2 billion, but costs have reportedly climbed by roughly $1 billion. Part of that increase includes developing a supplier park, which alone is estimated to cost about $300 million. The facility has been considered a potential U.S. production base for Audi vehicles, though no official plans have been confirmed.

Trouble Before Takeoff

Scout is also facing legal challenges related to its direct-to-consumer sales model. While some EV brands such as Tesla have been allowed to bypass traditional franchised dealerships in certain states, Scout’s decision to offer range-extender electric vehicles (EREVs) – rather than sticking to a strictly EV-only lineup – has complicated matters. Dealer groups argue that, as a Volkswagen-backed brand, Scout cannot legally bypass franchise laws that prohibit manufacturers from competing directly with their own dealers.

In short, even before delivering a single vehicle, Scout Motors is already facing significant financial, operational, and legal headwinds.

EREVs operate similarly to EVs, with electric motors as the sole source of propulsion. However, they still use a combustion engine – serving only as a generator to recharge the battery rather than directly driving the wheels. This setup is considered a viable solution to range anxiety, as EREV owners can refuel at a traditional gas station when the battery runs low.

The Products at Stake

So far, Scout has unveiled two models: the Traveler and the Terra. The Traveler is an SUV built on a body-on-frame chassis, positioning it to compete with models like the Jeep Recon and the Rivian R1S. Meanwhile, the Terra serves as the Traveler’s pickup truck counterpart, aiming to capture a share of the massive U.S. pickup market.

However, based on the latest report, the models could be pushed into the 2029 model year, depending on timing. If pricing remains unchanged, the Traveler and Terra are still expected to start at around $60,000.