Charged EVs | Dealerships sue Volkswagen over plans to sell Scout plug-in vehicles directly to consumers
In the Internet Age, consumers have gotten used to buying products directly from their makers, and many see the traditional arrangement by which automakers can sell their wares only through independent dealerships as a vestige of a previous century.
“Not so!” say dealers. “We provide essential product information and after-sales service.” But EVs require less service than legacy vehicles, and most (not all) dealers have done a poor job of educating car buyers about EVs. Dealer groups have also actively lobbied against pro-EV policies.
Newer EV-only brands (Tesla, Rivian) have been selling directly to consumers since their beginnings, and have fought lengthy legal battles to win the right to do so. Legacy OEMs might like to have a go at selling direct too, but this is more or less prohibited by law in every US state.
This hasn’t prevented OEMs from poking at the bricks of the venerable automaker/dealership wall. In 2025 Scout Motors, a new electrified-vehicle brand of the Volkswagen Group, announced plans to sell its EVs and PHEVs directly to consumers. Dealer groups immediately began organizing legal challenges.
Photos by John Voelcker
Now, two Volkswagen dealerships (Sunrise Imports LLC of Long Island, New York and Curran Volkswagen Inc. of Stratford, Connecticut) have lodged a class-action lawsuit against VW, accusing the automaker of attempting to skirt its legal obligations under the Volkswagen Dealer Agreement by selling Scouts directly to consumers.
The lawsuit, which was filed March 3, 2026, in the US District Court for the Eastern District of Virginia, states: “To avoid these obligations, VW formed separate companies (defendants Scout Motors, Inc. and Scout Motor Sales LLC) to effectively act as shell corporations for distribution.”
According to the lawsuit, Volkswagen sought to shirk its legal responsibilities “based on the fiction that Scout is separate from Volkswagen,” despite Scout CEO Scott Keogh’s statement in a recent podcast that “100% Scout Motors is part of the Volkswagen Group.”
Law firm Hagens Berman has brought successful litigation against Volkswagen on behalf of dealership owners in the past. “We believe Volkswagen was fully aware of its legal responsibilities to dealership owners when it chose to sell Scout vehicles directly to consumers online,” said Managing Partner Steve W. Berman. “It appears that VW has violated its own contract with its dealerships…and we intend to uphold the contractual rights of these small businesses.”
Scout’s web site offers pre-production reservations for $100 a pop. According to the lawsuit, over 150,000 individuals have already paid for reservations.
“VW dealerships are accordingly being deprived of their right and ability to sell these cutting-edge vehicles,” the lawsuit states. “Not only are the dealers losing their opportunity to collect $100 from every purchaser and make a profit from the vehicle’s sale, they are also injured by lost opportunities to finance, service and repair the vehicles, and to cross-sale [sic] these and other VW vehicles.”
Of course, one of the reasons plug-in vehicle brands don’t want to sell through dealerships is that they don’t believe dealers really do want to sell cutting-edge vehicles (but may be happy to “cross-sell” gas vehicles to customers who come in looking for EVs).
Whichever way the court decides this case, it won’t be the last battle in this long war.
Source: Hagens Berman
