The lawsuit, filed in Denver District Court, alleges that Colorado’s Department of Revenue Division of Motor Vehicles misinterpreted state law when it found that Scout produced only electric cars, and downplayed Volkswagen Group’s financial support of the brand. By Automotive News:
Scout’s dealer application and subsequent letter to the department alleged, according to the lawsuit, that it could obtain a license because of two exceptions under Colorado law: Scout had no co-branded franchised dealers in the state and because the manufacturer only builds electric vehicles and does not have co-branded franchised dealers in the state.
Colorado’s Motor Vehicle Dealer Board, which includes three new-car dealers, voted 6-2 on Dec. 16 to approve Scout’s application to become a dealer in the state.
The remainder of the motor vehicle dealer board consists of three used vehicle dealers and three members of the public.
The Colorado license was a notable win for Scout in pursuing direct-to-consumer sales in the US. The vote caused further uproar among dealers across the country as the issue of direct-to-consumer sales grew.
Along with Colorado, Scout is licensed to sell directly to customers in California, and it has obtained several permits in other states. Don’t worry, it has also faced challenges from salty dealers in those states. Usually Scout or Volkswagen of America are the ones who get sued, but that’s not the case here.
“This is a judicial review process of agency action,” Sox told Automotive News. “This is a little different than what we’ve done in Florida or what California has done, where you end up in federal court, Scout is the defendant and you say, ‘Hey, they’re breaking the law by what they’re doing.’”
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A spokesperson for the Colorado Department of Revenue’s Specialized Business Group, which includes the board, said the department does not comment on pending litigation.
Scout’s decision to sell an extended-range electric vehicle energy system alongside an all-electric version of the Traveler SUV and Terra pickup is at the center of the lawsuit.
The lawsuit calls Scout’s extended range system a plug-in hybrid system and therefore claims the brand does not qualify for exceptions in Colorado law intended for EV-only brands such as Rivian and Lucid.
The lawsuit goes on to claim that Scout’s connection to the Volkswagen Group makes them no different than Audi, Porsche or VW in Colorado, and that these three brands are prohibited from owning, operating or controlling a dealership.
While I understand why these dealers are miffed about the state and the Volkswagen Group, this might not be a problem if dealers hadn’t created such a terrible image for themselves over the past decades.
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