Scout Motors, in early win, granted license to sell direct to consumers in Colorado
Congrats to future Scout owners in Colorado!
Scout Motors has been granted a dealer license in Colorado, a notable victory for the Volkswagen Group-backed brand as it pursues direct-to-consumer sales in the U.S. despite intense pushback by dealers nationwide.
Colorado’s Motor Vehicle Dealer Board voted 6-2 on Dec. 16 to approve Scout’s application to become a dealer in the state, according to a spokesperson for the Colorado Department of Revenue’s Specialized Business Group, which includes the board.
The board has nine members, but the president of the board generally votes only if needed to break a tie, the spokesperson said.
“We’re disappointed,” Colorado Auto Dealers Association CEO Matthew Groves told Automotive News. “We have a law that specifically prohibits manufacturers from having control of the dealership and now the state’s just granted a manufacturer control of the dealership.”
Scout’s
detailed roadmap to sell an electric SUV and pickup to American consumers includes experience centers, speedy purchase transactions, stores in key U.S. markets and a flexible nationwide service footprint at launch.
Denver was one of the first 25 markets Scout identified for brand-owned rooftops in October 2024.
Groves acknowledged that there is a loophole for Tesla, Rivian and Lucid to sell vehicles in Colorado because those are all-EV brands and do not have franchise agreements with legacy automakers.
Groves said Scout is financially backed by VW Group and plans to offer an extended-range EV energy system which will utilize a gasoline engine as a generator.
Scout has revealed two vehicles: the Traveler SUV and Terra pickup.
VW Group, VW Group of America and Scout maintain the startup is and will remain independent.
Scout
is led by CEO Scott Keogh, the former head of VW Group of America.
The California New Car Dealers Association and
a group of VW and Audi dealers in Florida have sued to block Scout from selling models directly to consumers.
It’s unclear how many locations Scout is planning in Colorado or if the brand was granted dealer licenses in other states.
The license, which is valid from Dec. 16 until Oct. 31, 2026, will allow Scout to sell new, used and wholesale vehicles, the spokesperson said.
The Motor Vehicle Dealer Board’s members are three new-vehicle dealers, three used-vehicle dealers and three members of the public.
Scout highlights ‘customer-focused experience’
Cody Thacker, Scout’s vice president of commercial operations, in an emailed statement to Automotive News, thanked the Motor Vehicle Dealer Board for affirming the brand’s legal right to sell vehicles under Colorado law.
“Despite repeated attempts by dealer lobbyists to unfairly prevent Colorado consumers from choosing how they want to buy cars, today’s decisive approval by the Dealer Board ensures that we can continue moving forward with our business plans to invest in Colorado, employ Colorado workers and deliver a modern, customer-focused experience for thousands of future Scout owners in the state,” Thacker said.
Thacker referred to Scout as an independent American company in the statement and said its direct-sales model will allow the brand to lower costs for consumers, provide greater price transparency, deliver a faster and more convenient transaction process and establish one-to-one relationships with customers.
“We are grateful for this opportunity and look forward to serving customers in Colorado and across the country,” Thacker said in the statement.
Fred Emich IV, managing partner of Denver-based Emich Automotive which includes two VW dealerships, said Colorado’s current law defines EVs in a way that an extended-range EV would be considered an EV.
The Motor Vehicle Dealer Board also ruled that Scout is not a same line manufacturer as VW, Audi or Porsche, Emich said.
“My question is once they have a dealer’s license could they [Scout] pivot to selling ICE or mild hybrids?” Emich said.
Dealers’ appeal of Colorado Scout ruling is on the table
Groves said the association is considering next steps but said there are essentially two options.
“We can obviously appeal through litigation or we can just let Scout out to market and see if they can swim,” Groves said.
A Colorado bill that would have prevented Scout from selling direct to consumer was rejected by a House committee earlier in 2025 after passing the Colorado Senate, Colorado Public Radio reported.
The Colorado Automobile Dealers Association-supported bill would’ve amended the definition of a manufacturer of new vehicles to include an affiliate of a manufacturer. Manufacturers with affiliates would be required to sell vehicles through franchised dealerships.
Scout earlier in 2025 asked the U.S. government
to take all steps necessary to eliminate state motor vehicle franchise laws, calling them “burdensome restrictions on competition.”
Scout plans to begin output at a new plant in South Carolina in late 2027.
Scout
has not decided whether it’s going to launch production of both models at the same time or which powertrain will be available first.
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