Don't let the Scout become a status symbol; why $60k misses the point of the Revival

[tomgillotti]

The problem that I have with your posts is that you have chosen to focus your ire on this one corner of industry while completely ignoring history and the basic cause and effect of economics. Economies go through long term debt cycles. They always have and they always will, because people. I'm going to assume you are a Boomer. You were lucky to be born when you were. Millennials and Zoomers, as a cohort, literally cannot do what you did, no matter how hard they try (it is not because they are lazy as so many Boomers love to accuse). The cost of everything as a percentage of income is way higher than when you were younger. When you were a kid, people could put themselves through college by spinning pizzas. That is impossible now. Your parents (and likely you as well) could buy a house and raise a family on a single income. That is impossible now.

The US government embarked on structural (ie permanent) deficit spending starting in the 1980s. That extra, unearned, money went into the pockets of the private sector (this is an accounting fact). Your income was subsidized (increased) by debt that you will never pay back. Also, interest rates went down for 40 years. This allowed companies (and people) to borrow more and more money with the same payment. This increased prosperity (spending) at the time with promises to pay it back sometime in the future. Well, the future is now. The US govt is entering the endgame that afflicts all empires. Military spending and other entitlements are crowding out productive spending. The government has no choice but to print money to cover the shortfall. This results in the value of the currency falling.

You continue to look at unaffordability as a price problem when in fact it is a currency/debt problem. Prices for things have not gone UP, the value of the dollar has gone DOWN. Wages have not kept up as we have been continuously outsourcing jobs for decades. Look at this chart of Labor vs Capital's share of Gross Domestic Income:

View attachment 13934

Look at where the lines were when you were working and look at where they are now. And if AI actually works like they say it does, those lines will get even further apart.

Are you personally responsible for where we are today? Of course not. You were born when you were born and you had no control over that. We must play the hand that we're dealt societally and genetically. I don't hold you personally responsible and I'm actually glad that you feel some anguish for what the later generations are going through. But when you come in here and state that one tiny car company that is billions in debt can somehow undue decades of bad economic choices, it says to me that you do not have a firm grasp on the overall situation.

The bottom line is that we have to get those lines back together. That can be done by raising the blue line (increasing wages) or lowering the red line (decreasing the value of financial assets). You can guess where the various generations/classes land on those different options. That picture also explains why we have Trump and Mamdani. The next few years will be interesting. But trying to stop what's happening is like trying to stop a hurricane. All you can do is try to protect yourself and your family until it passes and then rebuild. As the parent of 2 teenage children (one Zoomer and one Alpha), I am glad that I will be able to weather the storm for them and they will be able to come out the other side - into a world that needs them to rebuild it and all of the opportunities that entails. So my message is doom for the next 7-8 years, then hope.

I appreciate the deep dive into macroeconomic history and fiat currency, but your entire essay rests on a single, fatal assumption.

I am 41 years old. I am an elder Millennial.

You confidently stated that my financial path—saving a massive portion of my income on an enlisted military salary and investing in real estate—is "literally impossible" for Millennials because we "cannot do what you did, no matter how hard they try."

Yet, I navigated the exact same economic landscape, housing market, and inflation charts you just posted. The ability to live below your means isn't a generational privilege; it's a choice. It required immense discipline, not "Boomer luck."

Blaming macroeconomic debt cycles to justify the normalization of $80,000 depreciating assets is exactly the kind of financial fatalism that keeps people broke. If the vehicle market has outpaced wages, the solution isn't to accept it as an inevitable symptom of the US debt cycle; the solution is to simply refuse to finance an $80,000 truck.

The math works the same regardless of what year you were born.

 

[strider]

I stand corrected. My essay does not rest on your generational age, it rests on mathematics and history. The fact that you were able to "make it" just proves that you are an exceptional person. Your experience is not the norm for your generation and it is even worse for Gen Z.

I'm not normalizing anything. I am trying to help people understand what is happening to their currency and why they are losing purchasing power. Here's a chart of US Government deficits as a percentage of GDP.

Federal Surplus or Deficit [-] as Percent of Gross Domestic Product

Graph and download economic data for Federal Surplus or Deficit [-] as Percent of Gross Domestic Product (FYFSDFYGDP) from 1930 to 2023 about budget, federal, percent, GDP, and USA.

fred.stlouisfed.org

That graph only goes through 2023 (next update is 3/27/26). The right side (since 2000) is a logarithmic function in that it is accelerating. Deficits will continue to increase which will continue to cause ever more inflation. If you add money to an economy without increasing production, prices go up. This is 6th grade math. We didn't feel it in the beginning because the percentages were smaller but the nature of exponential functions is that they accelerate in the end. We are in that acceleration phase.

So then coming back to the beginning, after 22 pages, what is the point of this thread? Scout has chosen to build the truck they have shown. No matter how much you complain, they cannot make it cheaper without changing the truck (less power, lower range, smaller, more spartan interior, etc.). I mean, I wish yachts were cheaper. By your logic if I just go onto an internet forum and complain then they'll lower the price so I'll be able to afford one. Now has Scout chosen the wrong market? Maybe that's your point and maybe you're right. We will see. All you can do is vote with your wallet. If enough people change their buying habits, the manufacturers will change their product mix - it's how markets work.

If you want a cheaper truck, buy a Slate, R2, new Ford truck, or if you must have a Scout, you will need to wait for the next generation of smaller vehicles. If you want the truck that Scout is building, you will need to pay $65k. As I said earlier, if you had put that $45k in gold a couple years back, the price has not moved. I do not know any other way to explain what is happening to your currency than that. But keep raging into the void......

 

[smc2023]

Just because I like random information - I looked up the debut of the TRD Pro which was about 10 years ago, released with a starting price around $41,385. Now days starting price is $72510. That's a 75% increase in price over that time period. Not sure this changes any of the previous arguments for or against @tomgillotti main discussion points. Not even sure what my point is of sharing it, other than I think it's a bit unfair to Scout Motors that "this" period in time is their starting point. One has to admit, there are many market forces completely out of their control, so I assume they'll set the price that is in line with every other manufacturer, in the sense that they have to pay their bills, their employees and they have to be profitable or a lot of us might be owning an Edsel, and nobody wants that.

 

[tomgillotti]

Just because I like random information - I looked up the debut of the TRD Pro which was about 10 years ago, released with a starting price around $41,385. Now days starting price is $72510. That's a 75% increase in price over that time period. Not sure this changes any of the previous arguments for or against @tomgillotti main discussion points. Not even sure what my point is of sharing it, other than I think it's a bit unfair to Scout Motors that "this" period in time is their starting point. One has to admit, there are many market forces completely out of their control, so I assume they'll set the price that is in line with every other manufacturer, in the sense that they have to pay their bills, their employees and they have to be profitable or a lot of us might be owning an Edsel, and nobody wants that.

That is a totally fair point on the TRD Pro data. A 75% price jump over a decade is wild, and it perfectly illustrates the macroeconomic headwinds the entire industry is dealing with right now. You are absolutely right that it is a brutal environment for Scout to launch in. Despite all my debates in this thread about where the entry price needs to be, I agree with you—none of us want to see them fail or become a modern-day Edsel (had to Google it... Wow, that's crazy how relatable it is to this discussion). We all want them to build a profitable, sustainable company.

Honestly, stepping away from the heavy economic arguments for a second... I checked my mail today and received the promotional mailer Scout sent out to reservation holders. I'm sure it's already been thoroughly dissected on the forum while I was away, but holding it really brought the excitement back to the surface.

Pricing debates aside, I am incredibly pumped for this vehicle. I'll even admit that I took the fold-out poster from the mailer and put it straight up on my wall. It completely clashes with the aesthetic of my house, but I don't even care. It’s just a beautifully designed machine.

At the end of the day, regardless of where we all stand on the pricing strategy, I think that's why we are all still in this thread. We just really want to see this truck become a reality.

 

[tomgillotti]

Just read the CarBuzz article that discusses VW's latest earnings call.

They stated that Scout is reportedly €1.2 billion over budget. They referenced the overwhelming (and unexpected) demand for the EREV. I find that surprising. In other markets, I would understand if they didn't expect that type of demand, but in the US market, it is interesting that they couldn't foresee the high demand for the EREV.

The fact that VW, as a whole, also revealed a massive drop in operating profits, is also concerning. I think we're all going to be holding our proverbial breaths to see where pricing for the EREV lands.

 

[Mousehunter]

I have not read every article - the but main one I saw about being over budget was SC on environmental projects associated with Scout's plant site (downstream remediation and wetland trades IIRC).

 

[Scoutsie]

Just read the CarBuzz article that discusses VW's latest earnings call.

They stated that Scout is reportedly €1.2 billion over budget. They referenced the overwhelming (and unexpected) demand for the EREV. I find that surprising. In other markets, I would understand if they didn't expect that type of demand, but in the US market, it is interesting that they couldn't foresee the high demand for the EREV.

The fact that VW, as a whole, also revealed a massive drop in operating profits, is also concerning. I think we're all going to be holding our proverbial breaths to see where pricing for the EREV lands.

Is it so shocking that they’re over budget when the administration has levied insane tariffs on imports and decimated the infrastructure that was supposed to support EV charging in the US? Of course there’s greater demand for the EREV if people don’t think that they’ll be able to reliably charge an EV. I’m not shocked to see that there were consequences.

(Our state, MA, just asked the administration to refund trillions to consumers in tariffs. It’s not going to happen, but they can ask.)

 

[speedrye]

I'm more inclined to believe Jamie when he says they're not over budget, though I guess it depends if we're talking about the factory, or development costs and Scout as a whole.

https://community.scoutmotors.com/threads/change-of-heart.7555/#post-75205

 

[tomgillotti]

I'm more inclined to believe Jamie when he says they're not over budget, though I guess it depends if we're talking about the factory, or development costs and Scout as a whole.

https://community.scoutmotors.com/threads/change-of-heart.7555/#post-75205

Jamie is doing his job well here, and I don't fault him for the PR response. It’s textbook corporate communication to reassure the base. But we need to separate the marketing semantics from the financial reality.

The counter-argument to the VW earnings report seems to hinge on this quote: "Scout Motors is investing and committing more to the project than initially quoted... That is actually a good thing and does not mean we're over budget."

In corporate finance, this is a distinction without a difference.

Jamie openly admits they had to pivot to add the EREV (which he confirms adds "significant complexity") and that they had to pour an additional $300 million into the supplier park. Whether corporate PR labels this an "expanded investment" or the VW earnings call labels it a "€1.2 billion cost overrun," the mathematical reality is identical: The Capital Expenditure (CapEx) required to get this vehicle to market has drastically increased since their initial projections.

For us as consumers, the label doesn't matter. The math does.

When a company has to inject hundreds of millions (or billions) of unplanned capital into development, engineering, and supply chains before producing a single vehicle, that cost doesn't just vanish. It is almost always passed down to the consumer to achieve the required profit margins.

Jamie's response actually reinforces my original concern. If they are pouring this much unplanned capital into the project to handle the EREV complexity, the internal pressure to price the Harvester well above that $60k mark is going to be immense. Call it an investment or an overrun; either way, it puts massive upward pressure on the final MSRP in a market that is already rejecting $70k+ vehicles.

 

[Jamie@ScoutMotors]

And your assumption is that this wasn't planned.

 

[tomgillotti]

And your assumption is that this wasn't planned.

Jamie, I appreciate the direct reply.

If the €1.2 billion to develop the EREV was fully baked into the original baseline budget from day one, then I happily stand corrected.

However, the earnings call specifically cited the overwhelming 80+% demand for the Harvester as the catalyst for this. Whether corporate leadership views this as a brilliantly executed strategic pivot or a reaction to unexpected demand doesn't really change the math for those of us holding reservations.

An additional €1.2 billion in CapEx is a massive number. My core point is simply that capital injections of that magnitude almost always put immense upward pressure on the final MSRP.

Planned or unplanned, the bill comes due. I think we are all just hoping Scout has a strategy to absorb that cost without pushing the final price out of reach for the mass market.

 

[Scoutsie]

Tom, you’ve said the same things and asked the same questions in different ways for 22 pages. Are you, like legally single yet?

 

[tomgillotti]

Tom, you’ve said the same things and asked the same questions in different ways for 22 pages. Are you, like legally single yet?

@Scoutsie, I’d appreciate it if we could keep the conversation focused on the vehicles and the market data, and refrain from personal attacks.

Whether someone is married, single, or navigating a divorce doesn't change the math on a €1.2 billion corporate cost overrun. I am here because I am genuinely excited about the Scout and enjoy discussing the industry economics with everyone. I'd like to keep things respectful.

If anyone has thoughts on how VW’s earnings report might actually impact the Harvester's final MSRP, I’d love to hear them.

 

[Jamie@ScoutMotors]

I fully understand the economics involved. At some point you have to trust that the thousands of people involved in this project know what they are doing.

 

[speedrye]

I fully understand the economics involved. At some point you have to trust that the thousands of people involved in this project know what they are doing.

Probably a bit jaded from companies like Tesla...

 

[Scoutsie]

@Scoutsie, I’d appreciate it if we could keep the conversation focused on the vehicles and the market data, and refrain from personal attacks.

Whether someone is married, single, or navigating a divorce doesn't change the math on a €1.2 billion corporate cost overrun. I am here because I am genuinely excited about the Scout and enjoy discussing the industry economics with everyone. I'd like to keep things respectful.

If anyone has thoughts on how VW’s earnings report might actually impact the Harvester's final MSRP, I’d love to hear them.

Fair. That was a low blow and I apologize. I can appreciate that you’ve got laser focus, but I find it extremely difficult to take you seriously because the things you bring up don’t always have any basis in reality. You just had a bona fide employee of Scout tell you that things aren’t as bad as you’d be made to believe. Are you going to keep arguing with him that he’s full of shit?

 

[tomgillotti]

I fully understand the economics involved. At some point you have to trust that the thousands of people involved in this project know what they are doing.

Jamie, fair enough. I don’t doubt for a second that the engineering, design, and manufacturing teams are world-class. The vehicle looks amazing, which is exactly why I’m here, holding my reservation, and rooting for you guys to succeed.

But from a consumer standpoint, "trusting the process" is tough when the broader automotive market is so incredibly volatile right now. We've seen plenty of brilliant teams build incredible vehicles over the last few years, only to hit a wall because the final corporate pricing didn't align with what the mass market could bear.

I genuinely hope the team completely nails the pricing strategy when the time comes. I'll gladly be the first in line to congratulate you when the configurator goes live and the math works. Until then, we'll all be watching with anticipation.

 

[tomgillotti]

Fair. That was a low blow and I apologize. I can appreciate that you’ve got laser focus, but I find it extremely difficult to take you seriously because the things you bring up don’t always have any basis in reality. You just had a bona fide employee of Scout tell you that things aren’t as bad as you’d be made to believe. Are you going to keep arguing with him that he’s full of shit?

Scoutsie, I appreciate the apology for the personal comment.

Regarding the rest of your post, if there is a specific data point you want to challenge—whether it’s the Cybertruck pricing shifts, the median cost of off-roaders, or the €1.2 billion CapEx increase straight from VW’s earnings call—I’m always happy to discuss the math. However, making a blanket claim that my posts aren't based in reality without citing a single example doesn't leave much room for an actual conversation.

As for Jamie, if you look at my reply to him, you'll see I have immense respect for the Scout team. Acknowledging the financial reality of corporate development costs and how they historically affect a final MSRP isn't arguing with an employee; it's just discussing the business side of the launch.