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SEARCHThe franchisees’ state-level actions follow a California auto dealers trade group lawsuit against the VW affiliate last year, both efforts to stop the EV maker’s plan to sell direct to consumers.
Scout has said it plans to start selling its EVs late next year, including its Terra pickup.
Scout Motors
More than a dozen California Volkswagen dealers are taking a new tack in the fight against direct Scout Motors sales in actions that could put the electric automaker’s license to sell in the state at risk.
The Volkswagen affiliate, which VW terms an independent “sister” company whose business decisions it has no control over, plans to release its first models late next year.
Following a lawsuit by the California New Car Dealers Association last April, 14 VW dealers in the state have separately filed protests with the California New Motor Vehicle Board over Scout’s planned sales.
The protests ask the board, which handles disputes between franchised dealers and automakers, to remedy their claims that Scout is violating a 2023 state law barring car manufacturers and their affiliates from competing against franchisees.
The actions will be heard by an administrative law judge whose ruling the board will decide on following a public hearing, said CNCDA President Brian Maas, who’s a lawyer by trade.
Outcomes could include suspension of Scout and/or VW’s licenses to sell in the state or an outright requirement that Scout sell its vehicles through franchised dealers, Maas said, adding that the state law the protests center on puts the burden of proof on the automaker.
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