Consumer Freedom and Scout Motors in South Carolina

[OleScout]

I sometimes wonder if the autoworkers union should step up in favor of this nation wide. They could all have raises and if they all went on strike at once they could crush the dealer’s association in one fell swoop

This, very risky, but logical.

 

[SpaceEVDriver]

I sure hope Scout can figure this out.

A word about Rivian's sales model, though: Please be more transparent and more consumer-friendly.

Once you start the purchase process with Rivian, they don't give you the full terms and contract until after you've donated your non-refundable $1000. I have $1000 in their bank that I'm hoping I can apply to the R2 when we need a replacement for our Mustang Mach-E in 2027. While going through the purchase process, we discovered their terms weren't as palatable for us as we thought they would be and at the same time (literally while I was going through purchase) I received an offer from Ford for a better buy at a better price. But because the $1000 donation was required so early in the process we weren't able to get it refunded. In the end, even with that $1000 gone missing, we still made out better with the Lightning than we would have with an R1T. But it's left a bitter taste. Not as bitter as working with most dealers, but still bitter.

 

[LastDayScout]

Forum members,

It's great to see all of the activity, enthusiasm, and discussion on the forum. By way of introduction, I serve as the Vice President of Growth at Scout Motors. In a nutshell, I'm responsible for retail strategy, customer experience, and commercial operations.

As many of you likely know, Scout Motors has selected a direct-to-consumer retail model. This means that Scout Motors will sell Scout vehicles to Scout customers. We believe it's the right strategy and, after talking to many consumers, believe it's what the market demands.

We would love nothing more than to build an Experience Center at the factory in Blythewood, South Carolina. From there, we could offer factory tours, driving experiences, product displays, and factory delivery of new vehicles. Unfortunately, antiquated regulations in South Carolina stand in our way.

We hope to get these laws changed and know that many state leaders see it the same way. To start the conversation in South Carolina, I posted the below article to LinkedIn today. I thought all of you should know our logic, vision, and requests of the state as well. Enjoy!

...

From: LinkedIn

The Post & Courier has it right: Scout Motors is proud to manufacture in the Palmetto State and we'd be honored if our brand became synonymous with South Carolina.

Another thing they have right: Scout Motors believes that freedom in car buying should be restored for South Carolina consumers.

Selling vehicles through franchised dealers is exactly the right strategy for some automakers. No doubt, it has the potential to serve the customers of established brands well.

It is equally true that selling vehicles directly to consumers is the best strategy for other automakers, Scout Motors included. Many automotive new entrants have, after reviewing the costs and benefits, made the same decision.

These two business models do not need to be mutually exclusive.

Like in all other industries—where companies and consumers freely decide on the best distribution model, or choose to use both—automotive distribution need not be an all-or-nothing proposition. Economists, academics, consumer protection groups, free market advocates, and federal agencies roundly agree: the consumer and competition are benefitted when the direct sale of automobiles is permitted.

Scout Motors also agrees. Consumers deserve the freedom to choose how they buy a car for many reasons, including:

• Affordability - Eliminating the double marginalization of a middleman lowers the retail price of Scout vehicles by thousands of dollars. This benefits both consumers and Scout Motors. By being within financial reach of more Americans, Scout Motors can achieve higher market share, run our production plant at higher capacities, and employ more South Carolinians.
• Transparency - Consumers are incredibly frustrated at the lack of straightforward pricing in auto buying and servicing. Surprise markups and add-ons have many consumers feeling irate. A direct sales model solves this entirely. Scout customers will always know what they’re paying.
• Customer experience - A direct sales model allows Scout Motors to have one-on-one relationships with our customers. With this, we can create centralized customer accounts, apps, and records that make buying, owning, and servicing Scout vehicles incredibly easy and seamless. Further, only in a direct sales model does Scout Motors maintain the operational flexibility necessary to quickly scale and adjust our national retail network to meet rapidly changing sales and service needs. Finally, we foresee a future in which data privacy and protection becomes a significant consumer concern and purchase driver; in a direct sales model, we can ensure that our customers (and their data) never become the product.
• EV focus - Unlike the EV negativity that now permeates franchised dealers and their sales teams (alas, over 5,000 franchised dealers twice petitioned President Biden to “hit the brakes” on EV sales and 49% of dealer sales staff report being "not excited at all" to sell EVs), a direct sales model allows us to build a sales team that knows our products, understands the litany of benefits offered by EVs, and reliably delivers ambitious monthly sales targets.
• Progress – The basic dealership experience has not changed in the last 75 years. But the world around it has. Consumers expect a modern retail experience that blends in-person and online options. They expect services that leverage and adopt modern technology. Online vehicle purchases completed in minutes, mobile service in your driveway, and over-the-air diagnostics and updates, for example, are just the tip of the iceberg. Customers deserve access to modern technologies and experiences, and Scout Motors plans to provide them through direct sales.

South Carolina consumers, like all American consumers, deserve freedom in choosing how they buy a car.

South Carolina consumers, like all American consumers, deserve affordable vehicles that aren’t touched by a middleman.

South Carolina workers, like all American workers, deserve to be able to buy the products that they manufacture.

And South Carolina citizens, like all American citizens, deserve business friendly policies that generate economic prosperity and that do not attempt to snuff-out new market entrants.

As it stands, because of antiquated regulations kept in place by the dealer lobby, South Carolinians will have to travel to other states to purchase the Scout vehicles that are made in Blythewood, South Carolina. This would be tragic, and an affront to both consumer choice and the free market that South Carolina ordinarily embraces.

But, we’re hopeful change is on the way. South Carolina, its legislature, and its leaders (especially South Carolina Governor's Office and South Carolina Department of Commerce) are visionary on economic development, industrial trends, and the future of transportation. They tackle hard issues when they arise, and I believe this issue will soon get the scrutiny it deserves.

I just sent messages to my legislators and the governor. I encourage all Scouts to do the same.

 

[codythacker]

I sure hope Scout can figure this out.

A word about Rivian's sales model, though: Please be more transparent and more consumer-friendly.

Once you start the purchase process with Rivian, they don't give you the full terms and contract until after you've donated your non-refundable $1000. I have $1000 in their bank that I'm hoping I can apply to the R2 when we need a replacement for our Mustang Mach-E in 2027. While going through the purchase process, we discovered their terms weren't as palatable for us as we thought they would be and at the same time (literally while I was going through purchase) I received an offer from Ford for a better buy at a better price. But because the $1000 donation was required so early in the process we weren't able to get it refunded. In the end, even with that $1000 gone missing, we still made out better with the Lightning than we would have with an R1T. But it's left a bitter taste. Not as bitter as working with most dealers, but still bitter.

Good lessons there. Thanks for sharing.

 

[codythacker]

Has anyone purchased through Costco? Wondering how that works. Assume you still need to deal with a local dealer at some point?

Exactly. The Costco program is, like Amazon, a lead generation tool for dealers. Costco has guidelines that are suggested to participating dealers, but the dealers don’t have to comply, and often don’t. It’s a crapshoot.

 

[codythacker]

I just sent messages to my legislators and the governor. I encourage all Scouts to do the same.

Thank you!

 

[J Alynn]

Exactly. The Costco program is, like Amazon, a lead generation tool for dealers. Costco has guidelines that are suggested to participating dealers, but the dealers don’t have to comply, and often don’t. It’s a crapshoot.

I imagine the task ahead of you is an exciting one to say the least . Would I be correct in thinking you have some experience in business law? Seems like you are well on the way for preparing to battle based on your initial post here on the forum. I wish you guys all the luck I can.
And as said, if your team can post a template file on here I think a lot of us as enthusiasts as well as dealership haters would be more than happy to join your “army”.
Years ago I did the BMW delivery experience then 3 years ago I went back to have my 17 year old driver do the teen driving school. My point on this is if you can develop the experience center then offer additional programs, jamboree-like events, harvest homecomings you bring people back to Blythwood and support the local economy for years to come.

 

[LastDayScout]

Thank you!

My company holds a SC dealer license. I still vote for direct sales!

 

[codythacker]

I imagine the task ahead of you is an exciting one to say the least . Would I be correct in thinking you have some experience in business law? Seems like you are well on the way for preparing to battle based on your initial post here on the forum. I wish you guys all the luck I can.
And as said, if your team can post a template file on here I think a lot of us as enthusiasts as well as dealership haters would be more than happy to join your “army”.
Years ago I did the BMW delivery experience then 3 years ago I went back to have my 17 year old driver do the teen driving school. My point on this is if you can develop the experience center then offer additional programs, jamboree-like events, harvest homecomings you bring people back to Blythwood and support the local economy for years to come.

Indeed. I was a Judge Advocate in the Marine Corps, but haven't practiced law in quite a few years. Who knew that I'd have more legal topics in automotive operations than as a lawyer?!

Your vision of what could happen at the Experience Center is exactly ours. Community hub, host site for events, delivery center, welcome center for factory tours, and departure point for off-road driving courses. The proximity of the SC Adventure Route raises many exciting possibilities!

 

[Albal]

..In my current small town, where there's at most one dealer per brand, none of the dealers work with Costco or any other broker because they would rather fleece the customer directly.

 

[Chuckles]

Does anyone here post on Reddit's South Carolina community? That might be a good place to inform people of the situation and garner support.

 

[J Alynn]

Indeed. I was a Judge Advocate in the Marine Corps, but haven't practiced law in quite a few years. Who knew that I'd have more legal topics in automotive operations than as a lawyer?!

Your vision of what could happen at the Experience Center is exactly ours. Community hub, host site for events, delivery center, welcome center for factory tours, and departure point for off-road driving courses. The proximity of the SC Adventure Route raises many exciting possibilities!

Well first off-thank you for your service.
I think SM becoming integral in Blythwood and as a destination center should be something that key political figures find appealing. With SM coming in, setting up 4k job opportunities they have the opportunity to become a destination town/city that interplays with the events you are hoping to achieve. Not being able to purchase directly in your home manufacturing state would be a big miss.
I’d be curious in years to come if other manufactures don’t specifically lock that opportunity into setting up shop in any given state. Sure SC provided tax and build incentives to SM but going the next step seems like the smart play. There’s opportunity for at least one new hotel-jobs for that, restaurants-I’m sure what Blythwood has now won’t accommodate that many employees.
The success of small towns who have these opportunities is the smart, forward thinkers. I loved Greenville when we did the BMW teen driver. Stayed there both nights and had dinner there and visited the farmer’s market. Such a great town.
Right out of college I worked for a summer in Corning NY and the way Corning Inc integrated itself into the town was BRILLIANT. We worked to maintain the towns architecture and image-even down to storefront canopy designs. Another subsidiary ran the wine fest, the art show and the summer community events. They set the tone for that town and funded a decent amount including the employees but to do that in Blythwood also requires the foresight of the government to make changes to antiquated policies and laws. It’s a bigger picture that requires bigger minds.

 

[R1TVT]

I sure hope Scout can figure this out.

A word about Rivian's sales model, though: Please be more transparent and more consumer-friendly.

Once you start the purchase process with Rivian, they don't give you the full terms and contract until after you've donated your non-refundable $1000. I have $1000 in their bank that I'm hoping I can apply to the R2 when we need a replacement for our Mustang Mach-E in 2027. While going through the purchase process, we discovered their terms weren't as palatable for us as we thought they would be and at the same time (literally while I was going through purchase) I received an offer from Ford for a better buy at a better price. But because the $1000 donation was required so early in the process we weren't able to get it refunded. In the end, even with that $1000 gone missing, we still made out better with the Lightning than we would have with an R1T. But it's left a bitter taste. Not as bitter as working with most dealers, but still bitter.

Not so sure it is fair to say that Rivian was not transparent with the reservation system - at least based on my experience. The entire process was very transparent, simple, and when it came time to convert my reservation to an actual order, I was able to do everything in the mobile app & with Docusign. To this point, below is a screen shot of one of my two deposits from Pre-Ordering a Rivian in 2019. I had a second deposit on a R1S that I cancelled - it was 100% fully refunded without any fuss!

 

[Logan]

I'm a bit far out from Blythewood SC to likely worry about making it out there to pickup my future Scout (~3k miles one way). But just wanted to say, I wish you the best of luck, and hope you succeed against the dealerships all over the US.

Like most, I think saying I have "extreme dislike" of dealers, might actually be underselling it. I very much dislike them, and avoid them at all costs. They're an added layer of profit that doesn't need to exist anymore. But if it were just that, I wouldn't hate them as much. They unfortunately have a well deserved reputation for being slimy just to make a few extra bucks.

In fact, I just saw an article on a dealership yesterday that added THREE "Post Delivery Inspection" fees (of ~$1500 each) onto the price of a used Chevy Bolt... In total they had added something like $5k in price to what was like a $15-20k vehicle. And it wasn't even as simple as "dealer markup", as it was hidden across areas of the pricing :/.

Also, I have a buddy in the auto industry, who's job is working with the dealers in various regions of the US, and they are constantly causing him problems, and doing damage to the OEM's brand (ie, a 10k markup on something hurts the brand, even if the dealer profits more). But because he has no direct control over their actions, he can't do anything about it really.

 

[SpaceEVDriver]

Not so sure it is fair to say that Rivian was not transparent with the reservation system - at least based on my experience. The entire process was very transparent, simple, and when it came time to convert my reservation to an actual order, I was able to do everything in the mobile app & with Docusign. To this point, below is a screen shot of one of my two deposits from Pre-Ordering a Rivian in 2019. I had a second deposit on a R1S that I cancelled - it was 100% fully refunded without any fuss!

It wasn't the reservation system.
It was during purchasing.
They required a $1k before I got to see the full terms of the contract. I've tried to get them to return the money, but they've refused. I did know it was non-refundable, but it's still unreasonable to require that money before the full terms of the contract are presented. If they required it before shipping the vehicle, I would understand.

 

[Albal]

It wasn't the reservation system.
It was during purchasing.
They required a $1k before I got to see the full terms of the contract. I've tried to get them to return the money, but they've refused. I did know it was non-refundable, but it's still unreasonable to require that money before the full terms of the contract are presented. If they required it before shipping the vehicle, I would understand.

Sound like that shouldn't be legal... Perhaps a site like ars technica might be interested in this story. It surprising (or perhaps not so surprising) how often when a big media outlet picks up this type of story, the company says "oops, that was a mistake!"...

 

[R1TVT]

It wasn't the reservation system.
It was during purchasing.
They required a $1k before I got to see the full terms of the contract. I've tried to get them to return the money, but they've refused. I did know it was non-refundable, but it's still unreasonable to require that money before the full terms of the contract are presented. If they required it before shipping the vehicle, I would understand.

If I am understanding you correctly, and as a potential consumer, you made the choice to convert your "reservation" to a purchase, at which point the $1000 becomes non-refundable (for valid reasons and to protect the company), and you made the decision to do that on your own. If you decided that weren't comfortable for any reason, you should not have converted your reservation.

My only point is that blaming them for how they choose to implement their own reservation system (and alluding to the fact that the way they operate is unfair) seems unreasonable in this case. If there were no protections put in place, and there was no process, it would cost the business an extraordinary amount of money to handle deal reversals and cancelled sales.

 

[Albal]

If I am understanding you correctly, and as a potential consumer, you made the choice to convert your "reservation" to a purchase, at which point the $1000 becomes non-refundable (for valid reasons and to protect the company), and you made the decision to do that on your own. If you decided that weren't comfortable for any reason, you should not have converted your reservation.

My only point is that blaming them for how they choose to implement their own reservation system (and alluding to the fact that the way they operate is unfair) seems unreasonable in this case. If there were no protections put in place, and there was no process, it would cost the business an extraordinary amount of money to handle deal reversals and cancelled sales.

My understanding is that they didn't show the full details of what was being agreed to (ie offered) before requiring a non-refundable deposit. In that situation, how are you supposed to evaluate the deal they are offering before giving them the money?

Also, I'm not sure how a more appropriate sales flow costs them money, as it's all automated? Unless you're saying that people are likely to not go through with the purchase once they see what the actual purchase details are, unless they are "encouraged" to move forward by a $1000 loss.

Anyway, I hope that SM's purchase flow ends up being as transparent as possible.

 

[SpaceEVDriver]

If I am understanding you correctly, and as a potential consumer, you made the choice to convert your "reservation" to a purchase, at which point the $1000 becomes non-refundable (for valid reasons and to protect the company), and you made the decision to do that on your own. If you decided that weren't comfortable for any reason, you should not have converted your reservation.

My only point is that blaming them for how they choose to implement their own reservation system (and alluding to the fact that the way they operate is unfair) seems unreasonable in this case. If there were no protections put in place, and there was no process, it would cost the business an extraordinary amount of money to handle deal reversals and cancelled sales.

It cost them next to nothing. The process is entirely electronic. If I had clicked a button that said, "ship the truck to me," then I would agree there's a cost to the business. But until that point the deposit should be refundable. It is not. They do not expose all of the terms before requiring the non-refundable deposit. Yes, it's my fault for thinking I would go through with it. But in this instance, their behavior is nearly as bad as having to interact with a dealer.

If their R2 is a quality offering and affordable, I will still likely consider purchasing, but only because their engineering and finance are separate entities. We may wait for a used R2 to become available because of that consideration.

I have lost all trust in their finance department and don't trust them any more than I trust any traditional dealer. In fact, I've been able to walk out of a dealership right up to the point of signing sales documents and not had to spend a dime. So to me, Rivian's lack of transparency is worse than a traditional dealer's.

I hope Scout Motors is willing and able to present their entire terms before one has to put up any money. Again, I'm not talking about reservations, but about the purchasing process.

 

[R1TVT]

People (not all people) do horrible things when they purchase expensive stuff. To be clear - I'm not saying the OP is one of them or insinuating that. I am saying is that Rivian needs to protect itself from the "possibility" of purchasers with ill-intent, so they establish a system for reserving, then purchasing a vehicle, with very specific policies. Same thing happened with Tesla, and they changed their policies. Rivian has changed its policy since I bought my truck, b/c people were jumping on trucks, taking a tax credit and then turning around and selling them (as one example of buyers flipping). YES, the entire purchase process for me was online (and actually in-app) before Docusigning a P&S. Before I had to docusign, I knew what my truck would cost, I knew what the accessories would cost, I knew what my tax credit would be, and I also knew the value of my trade-in and final purchase price. As far as the legalese in their Agreement goes, they aren't changing any of that for anyone. I could go back and look and see if my terms align with the Rivian P&S you can find online, but this isn't my hill to die on.

What I will say is that Rivian previously had a 7 day / 100 mile return policy. But b/c a lot of humans abused this, it was revoked completely. Now you must go through a test-drive process which must be scheduled and clear more hurdles when purchasing to ensure that you are a serious buyer. It's unfortunate that this is what companies will need to deal with when they have to cover all the bases. Again, I'm not saying that this was the case at all in this instance, and I would say the "customer is always right" and that a $1000 deposit that is refunded goes a long way toward building confidence. I am only emphasizing the fact that Rivian (in conjunction with the guide that was assigned to me) made the entire process simple and easy, and that transparency was not something I considered as an issue in my purchasing experience, or in receiving a full refund for my other reservation.