Volkswagen's Scout to Get $1.3 Billion in Incentives for Its South Carolina Factory

Volkswagen's Scout to get $1.3 billion in incentives for its South Carolina factory 7 photos
Photo: Volkswagen | Collage
Volkswagen Scout EV Pickup Truck and SUV rendering by TopElectricSUV.comVolkswagen Scout EV Pickup Truck and SUV rendering by TopElectricSUV.comScout Motors' renderings of its future vehicles: an electric SUV and an electric pickup truckScout Motors homepageScout CommunitiesFront-end teaser of the new still-unnamed Scout SUV
Volkswagen recently announced a $2 billion U.S. factory to build 200,000 off-road electric vehicles per year under the Scout brand starting in 2026. Volkswagen was convinced to set foot in South Carolina with a hefty incentive package worth almost $1.3 billion.
Volkswagen announced last year that it intends to revive the legendary Scout brand, confirming previous rumors. The plan has advanced fast, and earlier this month, Volkswagen chose South Carolina for its first factory. As always, the state had to bid for the factory's location, and the price was not insignificant. Scout Motors' production facility is estimated to cost around $2 billion to build, and more than half of the costs will be covered by state incentives.

On Monday, South Carolina governor Henry McMaster signed legislation approving $1.29 billion in state incentives for Scout Motors, Volkswagen's subsidiary. Scout could also receive up to $180 million in job development tax credits, depending on the number of people hired. Scout intends to assemble around 200,000 electric pickup trucks and SUVs annually and wants to hire 4,000 workers directly.

Building its own plant for Scout EVs wasn't Volkswagen's plan from the beginning. Instead, the German company wanted a contract manufacturer to make the electric off-roaders. Magna Steyr and Foxconn were rumored to duel for the trucks' production, but in the end, none got the contract. Volkswagen's strategy changed after the U.S. government unfolded the IRA plan with massive incentives for EV and battery production in North America.

The Scout factory will break ground this summer, and the production is planned to start by the end of 2026. The location has not been yet disclosed, although Scout CEO Scott Keogh told reporters that he "looked at 74 sites in a dozen states" before choosing South Carolina. "The site was ready, the governor himself put together an EV council [...] to make sure his state was ready," said Keogh.

Volkswagen wants Scout Motors to act as an independent company and even said it would adopt a startup strategy. Volkswagen has hinted that it might not sell Scout EVs through the Volkswagen dealership network, which has rattled the dealers. The lack of a pickup truck offering has been blamed for Volkswagen's lackluster sales in the U.S. Now that Scout is finally poised to offer this type of vehicle, dealers want to have it in their offer. They'll probably get a bone, but not the whole turkey.

Scout Motors assembly plant in South Carolina is not the only new factory Volkswagen plans in the U.S. The German company wants to build another production facility for the Audi brand that would complement the Volkswagen plant in Chattanooga. It also announced a Li-Ion battery factory in Canada. The plant will start production in 2027, so Volkswagen must find suppliers for the Scout EVs' batteries in the first year of production. The investments are part of a broad 180-billion-euro ($193-billion) plan that Volkswagen will roll out over the next five years.
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About the author: Cristian Agatie
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After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
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