California dealers demand Scout / VW stop direct-to-consumer sales with cease and desist letter

[joewilk45]

We all will be looking back wondering why we were wondering I agree this is just one of the many hurdles that lies ahead. Have an enjoyable day Happy holidays to everyone

 

[joewilk45]

Here's an article on Rivians finance outlined with VW. One would think Scout has comparable arrangements. The good thing is presendense has been established. They funded Rivian with no objections from VW dealers so scout should be independent just like Rivian ??

 

[joewilk45]

https://www.fool.com/investing/2024/12/26/a-deeper-dive-into-2-huge-rivian-victories/

 

[joewilk45]

https://www.fool.com/investing/2024/12/27/3-reasons-to-buy-rivian-stock-like-no-tomorrow/
Is VW approach towards EV development is by outside investment ??? But as you see with Rivian they need multiple stages of financing. And what Rivian learned is passed onto Scout ??

 

[timmyhil]

Unless Scout Motors go publicly traded or when they start selling scouts we will most likely never see any financial statements from them. Scout seems to be in a good place money wise at the moment.



Rivian is Rivian lol no matter how many times R.J. Changes the company name they always have money issues.

VW is just broke and is still handing checks out like the US government lol. But It seems they are trying hard to get out of what their situation is.

 

[joewilk45]

I was just referring to their model with Rivian that I would think mimics scout's investment

 

[blmtnc]

As much as I favor and want to participate in the direct sales model, I think there is some legitimacy (logical, not necessarily legal), to the argument that VW "controls" Scout. I mean, they're owned by them, right? Follow the money. Where are Scout's profits going to go? 100% reinvested into Scout? 100% sent back to the mothership? Or some blend in-between? One could argue that the current relationship was specifically architected for the express purpose of bypassing the dealer requirement while preserving the most direct ownership. It's not going to be enough, not in every state at least, to avoid being subject to existing franchise requirements. They're going to have to IPO, with VW taking a minority stake, at whatever level is below the definition of "control", while still being high enough to influence the things they want to. Even having a seat on the board might be too much. I'd like to hear the opinion of someone with a legal background on corporate structure. I wonder if any of the cases that will result from this have the potential to reach the Supreme Court, or is this already firmly established case law?

 

[timmyhil]

As much as I favor and want to participate in the direct sales model, I think there is some legitimacy (logical, not necessarily legal), to the argument that VW "controls" Scout. I mean, they're owned by them, right? Follow the money. Where are Scout's profits going to go? 100% reinvested into Scout? 100% sent back to the mothership? Or some blend in-between? One could argue that the current relationship was specifically architected for the express purpose of bypassing the dealer requirement while preserving the most direct ownership. It's not going to be enough, not in every state at least, to avoid being subject to existing franchise requirements. They're going to have to IPO, with VW taking a minority stake, at whatever level is below the definition of "control", while still being high enough to influence the things they want to. Even having a seat on the board might be too much. I'd like to hear the opinion of someone with a legal background on corporate structure. I wonder if any of the cases that will result from this have the potential to reach the Supreme Court, or is this already firmly established case law?

Scout can obviously pay back the money that VW gave them (i wish we knew the exact amount but it seems it’s a private amount because some articles say its 4b and others say its around 7b) which is probably the most responsible thing that will happen. Like on how on Shark tank the investors give money and the company has to pay it back slowly with each sales quarter and then after its paid off they are completely independent. But as one what Jamie has told me, Scout runs as if it’s independent from VW and they only check in once n awhile to see progress and how money is being spent.

The supreme court will most likely get involved and say that Scout can sell DTC model, since there is no federal law on DTC model being banned. But remember it’s only a Cease and Desists at the moment. No legal action has happened yet.

 

[lumplegs]

If so will pick up from factory. Will be a bit of a drive but I will be retired by then and take my time.

 

[joewilk45]

I think from what I read VW owned Scout and funded them and its revitalization. So how do you own something find it and not have ties to it. GM owns Chevy, Cadillac, Buick etc.But it's owned by GM. Scout isn't an independent start up it's Buick. A division of VW. And it's not IAW bringing these suits it's the NADA dealers who are all equity companies now not to many mom and pop dealers. But would anyone on this forum write a check for 5 billion and not have all your I 's and tees crossed if so their a lot of good bridges for sale but once again let's worry about what's in front of us

 

[timmyhil]

I think from what I read VW owned Scout and funded them and its revitalization. So how do you own something find it and not have ties to it. GM owns Chevy, Cadillac, Buick etc.But it's owned by GM. Scout isn't an independent start up it's Buick. A division of VW. And it's not IAW bringing these suits it's the NADA dealers who are all equity companies now not to many mom and pop dealers. But would anyone on this forum write a check for 5 billion and not have all your I 's and tees crossed if so their a lot of good bridges for sale but once again let's worry about what's in front of us

Did you see VADA is now nudging up against Scout? But unlike them they want to change how dealerships are, they want transparency on pricing.

https://www.cbtnews.com/virginia-au...ation-president-don-hall-looks-ahead-to-2025/

 

[Mr._Bill]

It's just a scare tactic trying to bully them into submission. If they had a legitimate case, it would already be filed with the court. Nothing can be done until they make the first actual Scout sale, and you can be sure it won't be in California.

 

[joewilk45]

What does everyone think the basic warranty will be ? 4/50 - 3/36 and 8 yrs on batteries ??? Once again i'm married 42 yrs two daughters 3 grandchildren I know not to worry about things i cannot control especially something that's 2 yrs away. I look forward to meeting some of you at scout gatherings and wish everyone a happy new year

 

[Chuckles]

What does everyone think the basic warranty will be ? 4/50 - 3/36 and 8 yrs on batteries ??? Once again i'm married 42 yrs two daughters 3 grandchildren I know not to worry about things i cannot control especially something that's 2 yrs away. I look forward to meeting some of you at scout gatherings and wish everyone a happy new year

https://www.scoutevforum.com/forum/...-open-in-2027-expanding-to-100-by-2032.11023/

Feds mandate 8 yr/100k battery warranty. I believe California requires 10/150k. The above article says "each Scout vehicle will come with a four-year, 48,000-mile comprehensive warranty; a seven-year, 100,000-mile electric drivetrain warranty and an eight-year, 100,000-mile high-voltage battery warranty.

Scout also intends to offer extended warranties. "

 

[OscarPhilips]

Jalopnik (May 2023) reported that Tesla, Rivian, and Lucid direct-to-consumer car sales cost dealers $910 million in profits, which is $910 million more in those customers' pockets. The dealership model is finally being challenged, and I am happy.

Of course, the California dealers are declaring war on Scout Motors' proposed direct sales model, but if I have to consummate my purchase at a dealer, I will walk away. So I see the same, simple answer for Jeep ... walk away from California. They will likely be sold out for a couple of years, they can market their vehicles as "Too Good for California" and revisit the State later on.