Scout Is Requesting a Major Favor from the Trump Administration | Carscoops

      The electric vehicle manufacturer seeks to eliminate dealers, labeling U.S. franchise laws as anti-competitive in a groundbreaking letter.

      Scout has characterized franchise laws as restrictive barriers that hinder competition, asserting that no other U.S. industry contends with such anti-competitive regulations. A few months prior, Scout faced a lawsuit from the California New Car Dealers Association.

      While President Donald Trump's second term presents several challenges for local car manufacturers, his promise to reduce regulations could also benefit many production companies. Scout Motors aspires to be among them, advocating for the abolition of state motor vehicle franchise laws to enable direct sales of its forthcoming vehicles to consumers.

      Since last year, Scout has been vigorously working to eliminate current pro-franchise laws. The company’s vice president for government and regulatory affairs, Blair Anderson, recently addressed an 11-page letter to the Department of Justice’s Anticompetitive Regulations Task Force, criticizing existing laws as “burdensome restrictions on competition.” He asserted that no other sector in the U.S. economy faces greater anti-competitive laws than the automotive industry.

      In his letter, he urged the Department of Justice and the Administration to investigate these protectionist, anti-competitive practices and to promote fair competition and innovation within the automotive sector, stating, “These practices contradict the potential for free and open markets where all can compete.”

      Anderson emphasized that it is illogical to compel new car manufacturers to implement the dealer franchise model, especially when such manufacturers have not requested any dealership investments to distribute their vehicles.

      Scout is encountering obstacles in certain states regarding direct consumer sales. For instance, in April, the California New Car Dealers Association filed a lawsuit against both Scout and Volkswagen to prevent them from pursuing direct-to-consumer sales.

      The letter was dispatched in late May, and it remains unknown if Scout has received a response. Nonetheless, its parent company, VW, is keen to highlight its significance to the U.S. economy. Recently, Volkswagen Group of America (VWGoA) engaged Deloitte to conduct a study on its investments and economic presence in the U.S.

      The findings indicate that the automaker is responsible for 164,470 direct, indirect, and induced jobs in the United States, contributing nearly $44 billion in economic output. Over the past six years, VWGoA has created more than 30,000 direct and indirect jobs while enhancing its economic impact by over $10 billion. Additionally, its operations and VW and Audi dealerships have generated $4.55 billion in federal, state, and local tax contributions.