VW-backed Scout Motors to build $2 billion factory in South Carolina

Scout Motors, the VW Group spin-off targeting the US market with rugged all-electric vehicles, is deepening its investment with plans to build a $2 billion factory capable of producing 200,000 electric vehicles a year in South Carolina.

There are a growing number of reasons for Scout Motors to keep the brand as red, white and blue as possible. And it’s not just to be marketed to American consumers. There are real incentives at play thanks to the Inflation Reduction Act and probably some kind of incentive package from the South Carolina state government. The state government has not disclosed details about what incentives may be provided to Scout. However, South Carolina Governor Henry McMaster has made it a priority to make the state an EV epicenter through an executive order signed in October 2022 that prioritizes building EV infrastructure, preparing the state workforce for advanced manufacturing jobs and the organization of electric vehicle planning under a centralized state. workgroup.

Scout Motors will build its factory in Blythewood, about 20 miles north of Columbia, eventually employing 4,000 people, on 1,600 acres right in the middle of the developing “battery belt.” The plant itself will occupy 1,100 acres of that property.

The grand opening is expected to occur in mid-2023, according to the company.

A teaser image of two Scout Motors vehicles, an all-electric truck and an SUV. Image Credits: explorer engines

Scout revives a classic nameplate with backgrounds and technology from VW Group. This factory, however, represents its independence from its parent company. From here, the EV brand will have to fend for itself on four tires against the Jeep Wrangler, Ford Bronco, and Rivian R1S.

Scout Motors isn’t going the contract manufacturing route despite rumors that the brand would partner with a company like Magna Steyr or Foxconn. Scout CEO Scott Keogh told TechCrunch that after due diligence, the company decided to bring manufacturing in-house.

“Look, being a start-up, we did our job,” Keogh told TechCrunch in a recent interview, adding that the company has weighed all options, from taking a green field approach and building a new factory to partnering with other e even take over an existing factory.

“At the end of the day, where we land is ‘manufacturing is a core expertise,’” he said. “We know how to do it pretty well.”

Manufacturing in the United States was always a priority, Keogh said, but the Inflation Reduction Act of 2022 provided that added incentive (literally) to commit to the idea of ​​building a factory.

“We think manufacturing in America is important, certainly, without a doubt, the Inflation Reduction Act, combined with what the states are doing, makes it a smart time to buy rather than rent,” Keogh said.

Scout will receive support from the South Carolina government. The incentive package was not disclosed on Friday. Keogh said the decision to locate in the state was driven by many factors, including an existing infrastructure for the auto industry and what Keogh called an “extremely strong port.”

The port of Charleston, which is about two hours from Columbia, is the eighth largest in the United States and the fastest growing, a strong incentive for an American brand with global roots and aspirations.

Keogh also praised the “beautiful bandwidth” of local talent at all levels thanks to local universities. “That will allow us to build a future-oriented company that is brimming with engineering talent,” he said.

In particular, Scout will have a valuable neighbor and up-and-coming player in the EV space: Redwood Materials. The Nevada-based battery recycling and materials startup recently announced its own $3.5 billion plan to create a battery recycling facility in Berkeley County, South Carolina.

“I think what they’re doing is brilliant and exactly right,” Keogh said when asked about this happy coincidence.

Although he declined to confirm any potential association between the two brands, battery recycling is very much on his mind and he said that over time, he expects more than 50% of Scout’s battery supply to come from recycled materials. “Yes, we will do it. Do we have a structured deal right now? Absolutely not. But that’s completely the plan,” she said.

For now, Scout Motors is focused on building its American-made, American-focused products by the end of 2026. An all-electric SUV will come first, with a pickup truck to follow a few months later. These vehicles will share VW components like engines and inverters, but not complete platforms, meaning they will have to carve their own way to market.

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James D. Brown
James D. Brown
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