If You Could Start a Car Company Today, What Would It Look Like?

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All Hail the Range Extender!

During the reveal of the Scout Motors Terra and Traveler, the audience was packed with enthusiasts. In addition to the tradition gaggle of media and executives, Scout brought in some long-time fans of the brand and the products to be there when the next phase of Scout launches.

One of the reasons why I was excited to be there as a journalist was because I wanted to see the reactions of these enthusiasts. Yes, they were brought in by Scout and were likely wined-and-dined by the Scout team, but still enthusiasts often speak their mind even in those scenarios.

As Scott Keogh, CEO of Scout Motors, gave an impassioned speech about the brand, the audience reacted accordingly. When it was mentioned that physical buttons were used, journalist Emme Hall expressed her appreciation quite loudly. And when the vehicles rolled out onto the stage, people cheered.

It’s all par for the course.

But like any true Steve Jobs announcement, there was a one more thing. Popping up on the screen was a red jerrycan, and the enthusiasts erupted into applause. That was because there would be a version of the Scout vehicles, called the Harvester, that had a gasoline-powered range extender.

From my ears, more people applauded the range extender than the actual vehicle itself.

When Scout announced its return, it was a time of EV ambition. But in the following two years, anti-EV propaganda has been in full swing, and while EV sales are continuing to grow, the excitement has diminished from those COVID-era times. Keogh said he talked to consumers, and consumers wanted the range extender as an option, so they included it.

We don’t have any details on what that motor will be. Some speculate it’ll be something from the Volkswagen lineup, but that’s not a guarantee.

I spoke with one owner who liked the idea of the extra range for when he’s fishing or camping far away from the grid. “I want the peace of mind,” he tells me. He’s not anti-EV and believes that he’ll spend nearly all his time driving on electricity, but appreciates the safety net.

That seems to be the use case for the range extender – a safety net. While it will be appreciated while towing, it appears much of the enthusiasm around offering it is that it eliminates range anxiety.

Some people probably don’t know what a range extender is, and thinks it’ll be a V8 gas engine like Scouts of old, and might be disappointed. But it will be a motor that sits compactly in the vehicle – not eliminating the frunk – and keeps the battery charged when it gets low.

I do think it’s smart – short term – to offer the range extender. A smart colleague of mine reminded me that after using their first Scout for awhile, owners will realize how little they actually use the gasoline-powered engine day-to-day, and when they add another vehicle to their garage or replace their current one, they might consider skipping the range extender on the next one.

I opted for the Harvester model on my reservation for a Terra pickup truck, because of “content reasons.” Hopefully in the 2 years or so that it’ll take for the truck to get here, I’ll be able to pay for it! 😂 Also shoutout to MissGoElectric for giving me crap about getting the range extender and not the full EV.

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Scout’s Direct-to-Consumer Model

This shouldn’t surprise anyone, but VW dealerships are big mad that they aren’t allowed to sell Scout Motors products. After the big reveal last Thursday, I was able to sit down with several Scout team members to talk about the distribution model, and why the company thinks that it is the best way to go.

Cody Thacker, Scout’s VP of commercial operations, provided an honest assessment of why Scout is going direct, and how it plans on having 100 rooftops in place (93 in the United States, and 7 in Canada) by 2032.

Thacker says that question lingers in every decision. Using data and analytics, Scout decided that skipping dealerships would be the right way to go when starting a new company. Scout wants to be able to control the entire experience, because buying an EV is a new experience for many people and there needs to be educated people who can help along the way.

Additionally, there’s people who don’t want to go into a dealership at all. Being able to buy 100% online, including arranging financing, is a way to have people browse without pressure and then decide on their own time to buy.

If you want help, you can get it. If you want to order from your sofa in your underwear, you can do that, too. That seems to really make sense to me, and it’s similar to how Tesla performs its sales operations. Now every Tesla experience isn’t the same, and the company has areas it 100% can improve upon, and it might end up being a similar situation with Scout. But it might not, assuming the company has researched Tesla extensively.

One other thing that Thacker pointed out is data that suggests that dealerships don’t even want to sell EVs. Even in California, there are dealerships that wouldn’t restock their EVs if they had the choice. While Thacker didn’t cite this, the open letter to Biden to slow his roll on EVs was a who’s who list of dealership groups who really don’t want to sell EVs. So if franchised dealerships don’t even want to sell the product, why work with them?

Car companies are in the business of making money, not being masochists.

Following a franchised dealership model would be easier in a lot of ways. Right now Tesla has to jump through some serious hoops in order to register a new car in some states. Those same hoops will have to be tackled by Scout in order to sell its wares.

Financing is also more difficult, because while Volkswagen is the largest investor so far in Scout, Scout will not be using VW’s financing arm for loans. They have to make their own deals, or start their own financing division.

I even asked if they were locked in to supporting Electrify America for things like free charging deals and was reminded, again, that they aren’t Volkswagen and have the freedom to choose the best deals for them and for Scout customers.

There’ll be three different types of Scout experiences. There’ll be studios, where you can go in and see a vehicle, learn about Scout, and even order a car. Then there’ll be more traditional stores, where you have the studio experience as a potential owner, but also a full service bay for performing work on cars. Then there’ll be an experience center where you can go and off-road and really experience your Scout in the way it was intended.

The first of those experience centers will be at the factory, where Thacker also said that customers will be able to pick up their Scouts if they choose to.

Scout imagines that most people who live close to a service center will visit the service center for repairs and maintenance, but there will be a mobile option for folks up to 200 miles away. Scout plans on being 200 miles or less with its service centers for 85% of its customers. The mobile option will not carry a service charge for the 200 miles limit, but the company hasn’t decided how to handle the individuals who live more than 200 miles away.

The company is going full Moneyball with its new venture, attempting to use all the tools available today (and more importantly, will be available in 2027) to be a successful car maker.

Will it succeed? That’s yet to be seen. The product seems to deliver on exactly what it needs to be. It’s up to the sales and marketing folks to make it happen, and there’s a million decisions that could make or break the company that need to be made.

More Scout Motors:

• Scout Motors Traveler and Terra revealed with Harvester range extender 

• 🎶 You Know It Makes Me Wanna Scout! 🎶 

Should VW Dealerships Be Mad?

As I said, Scout did some research into franchised dealerships, and they just don’t seem to want to sell EVs. Now some of that is because EVs are expensive (except when they aren’t), and they might take longer to sell because you’ll actually have to show the customer how to do some things, but it can’t be all that, can it?