The traditional automotive dealer model has stood the test of time, soldiering on largely unchallenged – at least, until a number of EV companies began surfacing with direct to consumer sales models. Ford CEO Jim Farley was once in favor of pivoting to that same sort of model – at least, as it pertains to EVs – but has since backed off that desire, even crediting dealers for helping the automaker achieve strong sales in Q2 2025. Now, Ford rival Scout Motors is trying to get the U.S. to scrap its dealer franchise laws altogether, however.
As Ford Authority reported last October, Scout Motors – which is part of Volkswagen Group – found itself in a bit of hot water with VW dealers recently amid its plans to sell vehicles directly to consumers, with those sellers resorting to legal challenges to try and block such a move. Those dealers want a proverbial piece of the pie, while Scout Motors wants to mimic the same direct sales model that its rivals have employed for some time. Scout plans to begin selling a pair of new electrified models – the Terra pickup and Traveler SUV – in 2027.
Now, according to Automotive News, Blair Anderson, Scout Motors vice president for government and regulatory affairs, has sent a letter to the Department of Justice (DOJ) Anticompetitive Regulations Task Force, asking it to eliminate state motor vehicle franchise laws. Anderson referred to those laws as “burdensome restrictions on competition.” “Outdated legacy state motor vehicle franchise laws – written decades ago in response to yesterday’s circumstances – have mutated into legal shields for established franchise dealership networks, barring any other business model from existing, let alone competing with these networks,” he added.
“We urge the Department of Justice and this Administration to probe these protectionist, anticompetitive schemes and to open the automotive industry to fair competition and innovation,” Anderson wrote. “These schemes are in direct conflict with the possibility of free and open markets where all can compete.” Anderson added that there is no justification to force new vehicle manufacturers to adopt the dealer franchise model, “especially when the new manufacturer has not asked any dealership to place any investment in distributing its vehicles, developed a more efficient alternative and will not sell any vehicles also offered for sale by a franchised dealer.”
Joining a host of other Blue Oval models.
The first model from this generation we've seen in some time.
The exec calls Chinese EV automakers '700-pound gorillas.'
It lost some ground to its cross-town rival in recent months, however.
A rather bizarre incident, indeed.
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“These schemes are in direct conflict with the possibility of free and open markets where all can compete.”
Agreed!
Although, I wonder how this comes as a surprise to Rivian (since that is what a Scout is).
Volkswagen is a legacy manufacturer. It should just sell the Scout at VW or Porsche-Audi dealerships and avoid all this mishegoss.