View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. Analysis
May 19, 2022

Where will VW build its new Scout EVs?

Volkswagen has announced plans to revive the Scout brand in the US for a new line of light trucks. What options does VW have for Scout assembly in the US?

By Mike Vousden

Volkswagen has announced plans to revive the Scout brand in the US – first used by International Harvester for its family off roader lineup built from 1961 to 1980, and since acquired by VW through Traton’s acquisition of Navistar in 2020.

Off-road focused SUV and pickup models are enjoying a renaissance in North America, so it’s no coincidence that nameplates including the Ford Bronco and Jeep Wagoneer have also made recent reappearances. To capitalize on the concurrent growth in North American EV sales, many of which being built on SUV and pickup platforms, VW’s Scout lineup will be entirely battery powered.

Naturally, to tempt American buyers, Scout will field a large electric SUV which the company describes as “rugged”, and a pickup truck, likely based on the same platform – echoing the bodystyle options offered on the original International Scout.

According to VW, the new models will be designed and built in the US, with production scheduled to begin in 2026. Sources familiar with the matter told Reuters that the new brand will represent a more than $100 million investment for VW, with the Group hoping annual sales in the long run could be as high as 250,000 according to the Wall Street Journal. If Scout is successful, CEO Herbert Diess believes the VW could grow its overall US market share from 4% to 10% by the end of the decade.

It’s worth noting that VW has not confirmed either the size of its investment, nor its targeted capacity, and that there is a noticeable mismatch between the two figures being reported in the press – $100 million would likely be far too low to achieve annual production at that volume.

Assuming there is some validity to those numbers, with the 250,000 annual production figure being very much a long term goal, what options does VW have for Scout assembly in the US?

A new facility Like other new EV brands in North America, Scout might opt to walk its own path. This entails either building its own bespoke production facility or, more likely, purchasing and refitting an existing facility. Notable EV players that took this route include Tesla, which bought the old GM/Toyota NUMMI plant in Fremont, California to build the Model S, and Rivian’s purchase of the Mitsubishi factory in Normal, Illinois.

This option seems unlikely based on the figures quoted, however, due to the large financial burden building or refitting a factory would represent. For VW to feasibly introduce a new brand to the US using a new facility, it would have to price Scout vehicles very high to recover those costs. This would put it into contention against the GMC Hummer EV and Rivian R1T, which both hover around $100,000. This price point would likely be far too high to achieve 250,000 sales per year.

An existing facility

As a result, the ballpark investment and capacity figures suggest that VW may take the cheaper option of refitting one of its existing facilities. The company’s existing US plant in Chattanooga, Tennessee has a claimed max capacity of 250,000 and currently builds the Atlas and Atlas Cross Sport. It is gearing up to build the ID.4 electric SUV for local sale alongside the Atlas range so will likely be operating close to its maximum capacity, with little to none left over to build Scout models.

Plus, VW says Scout models will be built on “a new technical platform concept”, suggesting it won’t be using the existing MEB or similar light vehicle platforms currently built at Chattanooga. The company is targeting Scout at the larger end of the market, which raises the possibility that it might utilize a full-size body-on-frame platform similar to the Ford F-150 Lightning or GMC Hummer EV. This brings improved towing and off-road performance compared to unibody vehicles, and reasonably straightforward powertrain integration, with batteries housed between the frame rails and drive units in place of typical front and rear differentials.

So, with Scout quite possibly looking to utilize a body-on-frame platform, and achieve annual capacity greater than can be achieved from Chattanooga, what options does VW have left? One interesting possibility would be to make use of International’s factory in Springfield, Ohio. This facility began assembly of International’s CV Class 3-4 heavy pickup and chassis trucks in 2018, with those models competing with Ford’s Super Duty and Chevrolet’s Silverado 2500HD/3500HD lineups. Considering this factory is already equipped to build body-on-frame vehicles, it’s possible that VW could invest its $100 million in adapting this line to build the new Scout range. This would, perhaps, be the most affordable option among those presented here and give VW a relatively easy way to introduce the new brand to the US.

This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Auto