AAH #775 - Scout Motors REVIVAL: Beating Tesla and Rivian with Buttons and Range!

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Gary, we get to do another show.

John, that's going to be great.

It is going to be good.

We've got Ryan Decker here.

He's the vice president, strategy and product.

I'm close, right?

And brand.

And brand, yes.

Strategy and brand.

That's right.

That's great to have you on the show here.

Great to be here.

And Joe DiMascio.

Yeah.

From Hagerty.

And you're from Scout Motors.

From Scout Motors, yes.

So, I mean, there is a connection because even though Ryan, you represent the brand-new Scout,

you've got a lot of heritage.

In fact, before the show started, Joe was talking about some of the...

Yeah, I talked to my colleague, Greg Ingold, as one of our guys who tracks the values of vintage cars.

And he said, yeah, Scout...

The interest is on the rise in particularly the Scout 2 from the 70s and them being modified

into six-figure vehicles in the way that first-generation Ford Broncos have been.

And Broncos are a very popular platform for extremely expensive and elaborate, you know,

restful modifications, you know, up to three, 400,000.

So, anyway, with that interest in the Scout 2, it means people perceive the brand

and that platform as like a desirable thing to put that much money into,

which could bode well for the modern version, you know.

There's probably only three or four products where people have made their living revitalizing

and keeping alive.

I won't name them all, but Scout is one of them.

Yeah.

There's a whole community of people who have kept the spare parts alive.

One of them's based in Oregon, I believe.

I can't remember the name, but I ran across that recently.

Brian, what is that?

I mean, you know, the brand's been out of the market for over 40 years.

A lot of the people who are restoring them and are interested in them

were born after the brand was killed off.

And what is it about?

First, I think we're making grand assumptions here that everybody knows about Scout.

And I'm willing to submit that a lot of people, even those who watch the show,

are not as familiar.

So, give us a background of where it came from and where you're going to bring it

and then address...

Well, I think I could do that as part of the history.

So, I'll do the full journey now, right?

So, 1968 and 1980, International Harvester.

At one point, I think one of the world's largest conglomerates,

no matter how you measured it by market cap,

it had agricultural routes going all the way back when,

at the very beginning of the 1900s.

From farm equipment to tractors, from tractors to passenger vehicles

and military vehicles and earth movers, you name it,

they had their fingers on a lot of different businesses,

including the Scout.

So, you can make the case that Scout was the first proper SUV.

I know there's some debate over that.

It was certainly among the first, what we now call an SUV today.

And of course, what that stood for at the time was the versatility,

the capability to go off-roading,

but also the comfort, the creature comfort to take the family on a picnic.

And frankly, that's how they positioned their brand.

That's what their advertising looked like when you go back and look at it.

And they had quite a run, right?

So, from 1960 to 1980, three generations,

what they called the 80 to 800 and then the Scout II,

a tremendous amount of complexity,

which might be one of the reasons they stopped operating in 1980,

but a beloved, beloved community.

And the product was what it was.

It was rugged, it was durable, it was capable,

but it really stood for way more than just a passenger vehicle.

I think I would argue it stood for optimism and togetherness

at a period of time when America was rapidly changing and growing.

Americans started exploring more, they started doing more.

And I would say that's what Scout was and that's what it stood for.

It was also a post office truck for a while,

and I know that very well because when I was in high school,

my job was washing post office trucks

for the city of Farmington, Michigan.

And as a 16 year old, I got to drive Scouts with right hand steer

and three on the floor.

And I, you know, as a gear head, I loved the challenge of doing that.

The official vehicle of US ski, post office truck,

I mean, you name it, they did a lot.

1980 happened for a variety of reasons.

International Harvester shut down the passenger vehicle business.

It meant closing a factory in Fort Wayne.

That meant obviously the negative impacts that means

you name it Corresponding Community,

but the community kept that flame burning 44 years later.

And they kept that flame burning through restomans,

through finding spare parts, through barn finds, you name it.

People found it, people loved Scout.

So in 2022, that's when Scout had another role to play,

which is when Scout Motors was created in September 2022

with the mission to revitalize Scout,

to do it in a way that's modern and exciting,

to build not just the products,

an entirely new company around Scout.

And that's what Scout Motors is.

That's our mission, not just products,

Greenfield Factory in South Carolina,

an entirely new supply chain,

a completely new engineering and design effort

that's right down the street, an all new platform,

all of which is setting out to,

yeah, honor that community and what Scout always was.

So you see real opportunity now because

obviously when you announced Scout,

originally it was going to be EV only.

The market has changed in that time.

And you guys have pivoted.

Talk a little about that.

You're going with an arrange extender now, right?

You're exactly right.

And we did pivot.

And when we announced ourselves to the world in 2022,

it was all electric.

Obviously the world changed quite a bit

in that period of time.

Regulatory environment changed,

customer feedback clearly is received.

And we made the decision to move towards the range extender.

Now, what we know the range extender does

is it still sort of delivers the best

of what makes it EV and EV.

Impressive torque, impressive zero to 60,

impressive cost of ownership.

Of course, you can lead into the sustainability aspects of it,

but with the confidence of having the built-in cast power generator

that hits that 500 miles of combined range number.

And that for us was the game changer

that still allows us to appeal

to the EV side of the market out there

but also bring in those people who have been otherwise reluctant

that this can't overcome the anxieties

that they perceive of going all electric.

What engine are you using for the range extender?

We haven't announced all details,

but it's a four-cylinder engine

that's very elegantly packaged.

And when you look about what an EREV does,

the engine has one job, right?

That one job is just to recharge a battery.

So when you think about how you tune that engine

and how you can get that engine operating

in the most efficient power bands,

that engine has one job.

That's a very efficient, very elegant way

to power this propulsion system.

Yeah, we've seen some really impressive

thermodynamic efficiency numbers

coming out of China for EREVs there

because to your point,

if the engine doesn't have to do

a full-duty cycle of a normal engine,

if it just has to generate electricity,

you can do a lot of things to the engine

to make it more efficient.

That's right. Engine, very efficiently tuned

to do one thing, which is spin that generator.

The generator charges the battery.

The battery is always what's propelling the wheels.

Ryan, how do you get around the problem?

There's going to be times where

that engine's really going to have to come on.

You know, the batteries run low.

What have you guys done to

damp down the engine noise,

the NVH and that kind of stuff?

Or have you even run into this kind of problem

where you're in a duty cycle

where that engine really has to go?

We are being mindful of, I would say,

the behaviors that we're trying to solve for.

There's the everyday commuting,

running errands. Of course,

we think that customers in that environment

are going to be in EV only.

There's normal highway cruising.

In those environments,

we'll call that simplification more of an auto mode.

That's obviously TBD.

But in that mode,

we're going to let that propulsion system do

what it does best, which is optimize

based on what the customers are telling it.

But then there's probably also going to be a mode

where long distances or higher loads

or higher speeds or elevation are going,

you name it, and there will be a mode

that the engine is designed to operate

within that environment as well.

And we think in every one of those environments,

we are meeting the full suite of customer requirements,

which is performance.

Obviously, we want a comfortable cabin experience

with NVH and noise and everything else.

And that's the work that our engineers are doing

right now as we speak.

So, Ryan, we're talking about the engine.

But what is the engine going into?

So, two products, Traveller SUV,

which is what we would call a mid-sized SUV,

going into the core of the off-road

mid-sized SUV market.

And then the Terra pickup truck,

a full-size pickup truck.

The only real difference in geometry on that vehicle

is our really short front overhangs,

which are a carryover from the SUV.

Short front overhangs, I know Chris Benjamin

would say makes it look great,

great proportions, but also has the,

you know, the functional off-road credibility

of approach angles and break-over angles

and things. So we really wanted to make sure

that we kept that, and that, by the way,

is what an original Scout looked like.

It had those really iconic proportions,

short front overhangs, weight shifted rearward.

Both of which

have the same underpinnings,

body on frame platform,

which is one of the ways that we really wanted

to lean into what made a Scout a Scout, right?

It was not a poser. It was arguably

the original SUV. I mean, it had things

like robust body on frame.

It had a solid axle. It had robust suspension.

We have all of those things. We still

have real door handles. We still have a tactile

interior. Our CEO

always jokes, Americans still know how to open

a car door. We very much believe that.

You know, 35 inch tires from

the factory. Those are all those old world

things that are really important to

Scout DNA. But again, we're not

stuck in 1980. It still needs to feel

cool. It needs to feel exciting. So

software that gets better. Really snappy,

really responsive

digital UX experience.

And the range extender, which we think is a game

changer power train.

So, okay.

Somebody's in the market for a vehicle.

I mean, there are lots

of vehicles in the categories that you're

describing. And

you're not selling just

to people who remember

Scout, right? You want to get a whole generation

of people. So what is it

in your mind that makes it sufficiently

compelling to say,

I want to try something that

is new?

Let me just kind of answer the big picture

point of view on the customer question.

And then we can talk more about the product

capability.

What we do very clearly see what's going

on in terms of customer behaviors. And

there's four really key themes in my opinion,

which is starting with COVID.

Americans are getting outside more than ever.

You name it what they're doing, whether it's hiking

trails or fishing or camping or pick your own

orchards. There is that big push

to just do more outside. There was sort of this

rediscovery of the outdoors. The second

thing that we know they're doing is it's more DIY

than ever. Whether this is flipping

houses or restoring old furniture.

Americans are simply more hands-on, right? You

see this trend, no matter where you look for

it as well. The third thing, which is really

unique to the U.S., is America's de-urbanizing.

People are moving out of our mega cities

and moving into mid-sized cities,

smaller cities, even

back to like hometowns. It's the only

country in the world from what we can see where people are doing

that, right? And then the fourth thing is

there's this little bit of like

put my screens down. I don't want to

just have buttons. I want buttons.

A little bit of digital teatock, so to speak.

And so those are sort of the four

megatrends, which we think have really pointed

to a lot of the decisions we've made, which

is when you're working harder, when

you're exploring more, when you're more hands-on,

when you, by the way, are moving out of

a big city, we think you need a more capable

vehicle. We think you need a tool. We

think you need a scout, right? So that's sort of the

really golden thread between customer

behavior and then our product choices.

That's not your question. What makes the scout

right to win? I would go back to that

conversation of old world

combined with the best of the new world

in a really just exciting

innovative way. Not to mention

even though if you don't really know

what scout was, or if you only remember

scout, people know that scout

was there. And I think that there is this

trend towards brands that have

authenticity and that have heritage. You see

it in lots of different categories

from sneakers to workwear

to record players. I mean, you see this trend

in a lot of different places.

And even if you never had a record player, you know

that it's cool, right? And maybe not the best example.

But I think there is something to that

idea of this brand has been here

before. They have a track record. I like

it. Now going back

to that old world versus new world,

show me another new entrant

that is delivering

500 miles of combined range, solid

axle, 35 inch tires, real handles, heavy

duty suspension. I haven't

found that yet, right? In that really

compelling cool way. By the way, at a price point,

which we publicly stated below 60

without any federal EV incentive

and we're holding the line on that number.

So when I look at our combined value

proposition pricing features characteristics,

I think we have a really credible,

really compelling product. And we know

by the way that the market interest has been

there. So I think we're on to something

as much as us saying it to ourselves.

Yeah, it's amazing to see how many

automakers have glommed on to the

hardcore off-road capability

market. And where do you see

that going? Because there's so many entries

in there right now.

Even if it's just a heavy-duty trim

line, for example, or

others coming in,

is the

segment going to grow enough to

accommodate you guys coming in

as well?

Well, we definitely think so

and from the early returns, we know

so. And I think there is

something to that American customer psychology

of freedom, right?

Even if you're never going to go rock crawling

or seriously off-roading, just knowing that you

have the capability. You have the tires,

you have mechanical lockers, you have a solid rack.

So there's something to that sense of freedom

that I think is almost fundamental

to American car buying, frankly

American buying psychology.

And going back to those trends

from what we see in the market

when we look at what's going on, we see it

growing. We see very healthy business.

We see good pricing. We see typically lower

incentives. We typically see inventory

turning much faster.

So it appears that there's very much a rapidly

growing addressable market for vehicles in this

category and we want a part of it.

Joe, in accuracy, are you guys finding

that younger people are getting collectible

cars and therefore they would have

the sort of like mindset

that they'd go to a scout?

Yeah, we obsessively track

millennials, Gen Z

interest in

all collector cars

and particularly

80s

and 90s and 2000s

cars, which

a lot of people like cars from

that's

more within the realm of their memory.

Scout is maybe a little outside of these

generations, but I think Scout will appeal

to these generations

for sure. I'm curious,

you don't speak that much

about the

EV-ness of Scout.

I'm just wondering how much, Ryan, your guys

are going to be

positioning it as everything you just said

versus an EV

version of everything you just said. I mean, I know

now it's range, isn't range

extender optional?

Or is it all going to be range extender

to begin with? It's

an optional powertrain, of course.

Because you will have full EV at the same time.

That's right.

I feel like in 2022,

your messaging when you first announced was very

heavy on EV, EV

and

that was going to be a big part of

what appealed to the markets.

Maybe you're changing your messaging now

or modified. I think our messaging

has always been consistent, which is Scout

is way more than just the powertrain or

propulsion system. I think you have to look at the sum of

our parts. And again,

to get our package

our off-road characteristics, our tire sizes,

our solid racks, our robustness,

our optional bench seats,

and a pretty cool powertrain,

it's just one of the things that make

our Scout our Scout.

So it's not that we necessarily

shy away from it. In fact, I would argue

it's super compelling

the EV-ness. And what I mean by that is

when you look at nearly a thousand pound feet of

torque, which publicly said that's a real

number. When you look at the zero to

60 times of vehicles, our sizes and our segments

that's an exciting number.

When you get into concepts like

software and potentially battery

chemistries that can get better year over year, that's

exciting. When you look at a front trunk

that's exciting. So it's less to me

about the EV-ness and it's more about

those feature by feature really cool and exciting

things I would say.

How do you take the brand to market? And I'm

wondering on marketing efforts like Jeep

Jamboree or Ford's got that

Raptor off-road driving

school in Utah.

But I'm just wondering

in terms of advertising

marketing, what are your

plans there?

Well, John, I do got to go back to

when you and I first met actually, which was

in November

2022. A few months

after the company was formed. In Dallas, Texas.

I think at the time the company was very

young and scrappy. We had about seven people.

Yes, we invited you to Dallas and we

invited for lack of a better word, some scout OGs

to Dallas. And if you remember

we invited you all down there to show you

sort of everything we had, which is we had a

pretty rough model. It's changed a little

bit since you saw it of course. We had a

business plan. We had a point of view on the

brand. But what we really wanted down there

was not to show off. We wanted feedback,

right? We wanted to listen. We wanted to lean

into that scout community that is out

there. And I thought that was a really

great first

impression. And a big part of our go-to

market is to continue to lean in to the

community that's out there. We wanted

their feedback. We want to meet them.

That's why we have been increasingly showing up

at events. Most recently at the LA Auto Show

at the end of 2025.

But yeah, to bring the scout brand

to life. But I would argue it's just as

important so we can shake hands, get to

meet our fans, get to meet our reservation

holders and frankly introduce scout to a

whole new audience. So that peer to peer

that community led plan will very

much be a big part of how we go to

market. Interesting. And one of the things

I remember from that presentation is that

you wanted to position

the brand as sort of a combination

of Levi's and Apple.

You have a good memory. Yeah, yeah, yeah.

And Yeti.

That's right. You know, so

this sort of

comfortable, you know

brands that you're

familiar with, but also cutting edge

technology. Well, summarized.

And I think you just got to another big

point that I wanted to bring up, which is

one of the things that we believe the

eREV is capable. But also what we

believe Scout in its entirety is capable

of, which is being a 50 state brand.

Right. And that's sort of what we

met by some of those examples you brought up.

We don't want to be

overly indexing to just being a coastal

brand, which I think if you look at a lot of

new entrants for various reasons, they

over index heavily towards the coast,

whether it's price point, whether it's

technology, whether it's product characteristics,

that's not what Scout was.

That's not what we want it to be.

We need and want Scout to be a brand

that could be successful in all 50 states, including

the heartland. And we're confident

that if you can do that, you also can win

along the coast. But what we've observed

is that's a bit of a one way street.

Right. If you design and market

and position a product for the coast,

you tough sledding, getting into

some more heartland locations, but it does work

the other way around. If you have the

authenticity and the credibility to work in

the heartland, it works out along the

coast. And again, you brought up a couple of those examples.

I won't name them. That's an amazing

thing that you just said.

That if you do a vehicle with authenticity

that works in

the Midwest, it also works

on the coast. The Midwest. I've never heard

anyone say anything. We've always thought it's the opposite.

Yeah, yeah, yeah.

We've observed it's a one way street,

and you brought up Yeti, right?

We've studied that brand. We've looked

at it. They've done some really cool things. They've been

very authentic. And when they started, it

was basically the singular purpose

to keep your fish or your ducks

cold all day, right?

And then look where they spread. They're

everywhere, keeping your coffee hot. And still

your fish and your ducks cold, right?

I think that's a great case study for

what I just wanted to elaborate on there.

So, okay, so

keeping on that theme, if we go back

to say your ag roots,

okay, one of the things that's big

in ag right now is this right to repair

concern that, you know, with John Deers

got, you know, want to control everything.

And one of the

things that I've read about Scout is that you guys

are very interested in making

sure that the vehicle's engineered

so that people can actually work on them.

Totally. Talk about that.

Well, we're right in the thick of that.

So, I want to make

sure I don't say anything that we haven't publicly said yet,

but you're exactly right.

We just went through this exercise where

we identify, we want Scouts to

be embraced by, for lack of better words,

tinker culture, right?

We want people to work on these with their own hands.

DIY. DIY.

So, we just looked at, for example,

what are the top 10, 15, 20 things

that we expect DIYers to do

on this car? And then we went very deep.

How easy is it to do?

How long does it take? Do you have to take anything

else apart? How do you take things apart?

Do you have to rip off any glued things? Or is it all

you can imagine it leads you into all these places

and we felt very good

about where that landed and we've taken very deliberate

decisions on the project

to make sure that all of those items were,

in fact, DIY-able, so to speak.

And that's a really important

part of Scout, right?

We want that. We know the category expects that.

We know that's what Scout always was.

Any examples?

Everything from the oil filter on the E-Rove

to engine filters

to cabin filters

to all sorts of fluids

replacement. We want these things to be

accessible, right? What about

cosmetically exterior

and that sort of thing? That was one of the great pieces

of feedback we got in Dallas, right?

One of the things we heard was

make sure you don't make the exterior and the bumpers

too precious, right? Bumpers are there

for protection. Let's not forget, right?

So that is feedback we've heard loud and clear

going back to 2022

and very much that we've incorporated.

So, I mean, this is also

like flying in the face of what's going on

in the auto industry now. I mean, it's just like

auto companies are basically, no, no, no, these are

our vehicles. You can't mess with them.

You guys are saying mess with them?

We're saying DIY on them. That's always

what's going on. That's pretty interesting

because, you know, we're seeing Slate

the new

inexpensive electric pickup

talking about that and

Ford with the Maverick has done

a lot of

mods that people can do to their own vehicle

but you guys are a bit more

premium. In fact, a lot more

premium than either of those

products. So, it's very interesting for me

to hear you say that you're

going to encourage and you expect

the owners to modify

their vehicles and

maybe not just buy parts that they

can bolt on but actually

do some of the mods themselves.

A couple of points. You talked to any customer

on this. You researched this. You clinic this. You focus

through this. The respondents will be

overwhelming. Yes, I want

to do that in my driveway. So, I would

argue we're just listening to the customer, right?

And they're speaking to us very clearly and we want to

make sure we're listening to them. I do want

to address the premiumness though. Okay. Yeah.

I would say we're not

necessarily premium. I would say our value

proposition at our price point for the

future values that you get at our price

point is actually very much in the core

of the market. And that price point

at $45,000 base? Below

$60,000. Okay.

Again, when I won't name products, when

I look at transaction prices in 2025,

loaded after all the incentive, I

see our core competitors

now sneaking up on $70,000.

I see many of our competitors now well north of

$60,000. I don't think sneaking

up is quite the word. I think they're probably

marching up there. What I like

about, again, I think you have to look at

not just our sticker price. You have to look

at what you get for that price. I feel like

we have a very compelling customer value

proposition for what we're delivering at the price

point we're at. Who do you see as your

competitors? I don't want to name specific

competitors as you can imagine, but

again, midsize, off-road

SUDs. You can name them all

I'm sure we can.

Earlier you said the truck

What's the truck going to be called? The Terra.

Inspired by its original name, by the way.

It was always the Scout Terra.

It's a full-size truck, you're saying.

You're saying it's a half

ton light duty pickup.

Four and a half foot by five and a half foot

bed, overall proportions that are very

much in the neighborhood of every other

full-size pickup truck out there. The

only real difference of our proportions are

front overhang and then our off-road

characteristics. We want every Scout

even our base trims, so to speak

to still have credible ground

clearances, approach angles, departure angles.

Those are things that Scout always had

and we're still solving for.

So

when the

$7,500

tax credit was

announced to go away, did you guys have an oh

shit moment or what happened?

We've said very clearly

we believe we want to make a great

product at a great price and we're not

building this company around

incentives which may or may not go away

one day and so

our business plan was never predicated

on that sort of incentive

or frankly any incentive. Our business plan was

cool products, good price

core of the market, listening to customers

and that's what we've adhered to

and that's what we'll continue to adhere to.

So I gotta believe that you guys are looking

at taking power into the field

with customers taking power

in with their Scout. Electric

outlets, being able to run a campsite

being able to run table saws

and all kinds of things. Well,

summarized. So that is another one of

sort of the future values that you get from the range

center. Of course with a

high voltage battery onboard you can

off-board 240 volts of power

or 120 volts of power or USB

power, right? So off-boarding

power is what we see as a key part

of our value proposition. Now

multiplied even further

by the fact that you also have that in-field

generator so you can do that for

longer using gasoline

as a refueling source. So we think that's

a really really cool thing. So whether it's a campsite

whether it's a job site, whether it's emergency

power for your home, we think that is

a really cool thing that we will definitely

celebrate with our package. So it'll

have bi-directional charging?

We will be able to off-board power for sure.

What's your timeline on all this?

Well if you look down at what's going on

right? I get a kick out

of anywhere you look at Scout we're building something

right? So if you look at our HR we're

hiring, we're recruiting, we're onboarding, if you

look at IT we're establishing all of our technology

environments but the big build site is

if you look down what's going on in South Carolina.

So tremendous progress but

more work to do right? It was a green-filled

factory that we only announced

in February 2023. So

honestly I think we made a tremendous

amount of progress in a short

amount of time. I know everyone's like faster, faster,

faster. But I was like not bad

considering only a few years ago

we had six employees in a dream

right? So the timeline

is we're still targeting initial production in

2027. Deliveries will start thereafter.

This year is a big

build year for us. The vehicle project

becomes real. Our parts suppliers

get awarded. The factory goes

from what looks

like a big dirt construction site into a

more polished construction site.

Actually we had a really cool moment. First

equipment first robot

was installed in the factory I think last week

actually. So buildings are nearing

completion and now you get into

what's going on inside those buildings which

you can imagine is a lot of really precise

process equipment installation

and in parallel also now

starting to ramp up hiring at that site.

So that site will hope soon here

hire 4,000 folks

the first of which have already

started. So the first maintenance

folks who will work on the factory floor have started

super proud moment for everyone at Scout

and a huge deal for that community

down there. This is Blythe Wood

South Carolina. So where is that?

It's about 20 miles outside of Columbia

in what the state calls

the Midlands and if you know South

Carolina there's the coastal area which has

a pretty significant industrial

footprint and then there's the northern part of the state

Greenville which also has some

automotive industrialization

but the middle part of the state was largely

unaddressed from an automotive perspective

and from a large manufacturing

perspective. Now there's

a great supplier

network in the area.

There's great access to talent

lots of universities whether it's

undergraduate engineering universities in the area

you can imagine there's Clemson, there's University of

South Carolina, there's the North Carolina Research

Triangle but there's a really comprehensive

network of technical colleges and community colleges

and HBCU universities.

So just a great place

that has access

to all the things you need to build the factory in terms of infrastructure

Flatland

Electricity Railroad but I would say

more importantly access to really talented

people in a workforce that we're

going to be able to recruit there.

I want to ask you more about that but let's take

a quick commercial break right now

we're going to give a shout out to our great sponsor

Bridgestone

Knowing that a little rain won't

slow down your day. That's what

really matters. Bridgestone

Toronto Fire Track Tires

Confident control in wet conditions

All right we're back talking with Ryan

Decker all things scout. You mentioned

that you're going to have 4,000 people in that plant

that's a lot of people

so that tells me either two things

you guys have got some pretty aggressive

volume sales volume

targets and or

it's going to be a pretty vertically

integrated manufacturing facility

Look I think

we've also said publicly that that site

as we're currently building it can make

200,000 cars a year

with the capacity to basically double

the footprint of the site and therefore double capacity

and we want to fill it up

Early returns

of our market reaction have been

really positive. We recognize we have

more work to do to go prove that out

but we want to fill that out and we think

we can because the segments we're

going in are I would say some of the

largest addressable

segments frankly in the world's automotive

industry mid-size SUV full-size trucks

customers want products in these segments

we think we got a good product

we want to fill that plant up

There was also talk at least in the media

that Audi was going to get

a product out of that plant

and anything you can tell us or can't tell us

I certainly cannot speak to anything specific on that

from what we have said from the beginning

is that we do believe we have a very credible

platform that other users might

want and that we have

a clean field factory that is designed

to be efficient and accommodate all kinds of products

but I won't speak to any specifics

One of the things we haven't even mentioned

is that VW

is the parent company

So talk about the relationship there

The Volkswagen group

I would say

is our investor

I think new

companies need to be capitalized

in our case the Volkswagen group has capitalized us

they financed us

we are our only investor at the time

and they do support us

so yes that means money

which is nice of course

very thankful for that

but it also does mean expertise in some places where we need it

and I actually think that's one of our superpowers

as a young company

so on one hand we are a startup

we're young, we're scrappy, we move fast

sometimes we make mistakes

we're building everything from a clean sheet

but on the other hand we have access to some of the world's best

automotive expertise

that's happening here in Detroit

Right down the street, about 5 miles up the road

Also in Germany

No, no, no, no

Absolutely, no, it's all happening here

Ryan, I think you got to talk about this

because it's important

to establish

Scout is separate from Volkswagen

You and the original

6 or 7 people that I met in

2022 had to quit

your jobs at Volkswagen

You had to turn in your company

laptop, your company, phones

I think you even gave up

your retirement plans

and stuff like that

Not sure if I had insurance for a period of time

but I was healthy through it

but yes, you're absolutely right

This brings us to the big argument

now, Scout wanting to sell

direct and Volkswagen

dealers being up in arms about it

but you

really are trying to position

Scout as you said

Volkswagen as an investor

This is not necessarily

like another brand or division

of Volkswagen group

So thank you for that

Our relationship is with the Volkswagen group

We're not directly connected to any other Volkswagen group

brand, including Volkswagen

But yeah, it's not that we're positioning

Scout motors as it is

It's how we're structurally set up

So we are a Delaware corporation

with an American style board of directors

that is operating completely independently here in America

Greenfield Factory in South Carolina

And how are these dealers going to happen then?

What's the question?

How are you going about building a dealer body?

What are the goals?

We've announced our intent to go direct to consumer

for sales and service

As you know, you've got a big fight ahead of yourselves

So does Sony

and Honda with the Affila

brand, they want to sell direct

I mean we just reported today

I think Colorado dealers are interestingly

not suing you guys, they're suing the state of Colorado

for allowing

Scout to be able to sell direct

I know this is a sticky subject

and I know you've got to be careful on what you say

but how do you guys

think that you can overcome this challenge?

I don't want to speak to the specifics of

that fight one way or the other

What I will say is that we very much want to fight

for our customers

Right at the end of the day, that's what we want to do

We want to compete

We want to deliver the best possible sales

experience for our customers

And I think again, going back

when you listen to customers, what do they want?

They want a fair price, they want a good deal

They want transparency, they want trust

They want a lot of digital features

And we listened, and that's why we announced our intent

to go direct to consumer

We want to compete

And I think at the end of the day, that's fundamentally an American thing

Competing leads to innovation

leads to better customer experiences

That's what we're doing

So let's say I want to buy one

Where will you go? And you're talking about service

Where will that happen?

We publicly communicated this at our unveiling

And I'll just underline it

We announced that we will have a nationwide network

I don't know

Precisely the number of locations

But it's a robust number of locations

Physical locations

Initially, from the get

Ramps, as you can imagine

Those locations will be delivery locations

And of course service locations

We think that transaction can exist

In a digital environment

That's fast, that's responsive

That's transparent, pricing is transparent

So I would say

An ideal combination of digital

Plus a brick and mortar experience

So somebody goes online

Configures their vehicle

Gets the price of their vehicle

Ideally in a few clicks does that

Secures financing and closes the transaction

Right online

And then goes to a physical location

And picks up the vehicle

When they need service

And that is one of our observations

I guess you can say a third mover now

On direct to consumer

Is we very much want to make sure

We're solving the pain points that we've seen

So you can read some of the headlines

When it comes to how long does it take

To get my car serviced

How long does it take me to get a spare part

There's been some pain points

So we are heavily biasing our experience

To help solve some of those service orientated pain points

We really want these to be hard working facilities

I'll say it for you

Tesla's proved it can be done

Lucid's proved it can be done

Rivian's proved it can be done

And I'm sure you learned all their pain points

One of the things that Tesla did

That I thought was pretty interesting

Was mobile service

Is that anything that you guys are looking at?

Again I won't get into

Operational details

Frankly I don't know all of them

But I think going back to that earlier conversation

On DIY and Tinker culture

I think that's good for the customer

But the easier you can make things to repair

It's also good for the business

It's just faster you can do it

Where a customer is as opposed to having to bring them in

And put them on a lift and bring all these tools

So that is definitely a big part

Of the thinking which is easier is better

Faster is better

Ryan earlier in your career

You worked for ExxonMobile

One of the major oil companies on the planet

And then when you worked at Audi

You worked on the electric part

Of the business as well

So you have this

Are you a very unique perspective

On these two things

How do you see all this playing out

Just in general not necessarily just Scout

Well

I'll answer from the big point of view

First which is

I think that I've worked in support of American energy

So you can make the case

Oil and gas traditionally

Oil and energy but solar

Poles and wires and one day

Batteries that's all American energy

And I think my career has kind of navigated

Through it from both sides of it

And I think that's actually what Scout is

I think we're an American energy play

In that you can power up gasoline

But you can also power up poles and wires and electricity

I think that's a pretty cool thing

That should be celebrated and not really kind of polarized

In terms of

My career because it is a little bit of an irony

In there and like many of us

I think careers kind of navigate their way through

Engineer by trade

Projects and I think I did

Help build some pretty cool projects

At XMobile and definitely got to work on

Some cool projects in the automotive industry

So there's a golden thread in there

I have to bring up you talked about

Volkswagen's investment in

Scout Volkswagen also is investing

A huge amount in Rivian which you just mentioned

And so there's kind of this whole kind

Of triangle between Volkswagen

Rivian and Scout

If I perceive this correctly

And which is interesting

At least to me

And Rivian's

Arguably somewhat of a competitor

To the Scout I think their price point

Is fair bit higher

But they're both

Lifestyle electric

Vehicle type

Adventure vehicles

So

Well

First of all going back to that

It's kind of what you guys saw there

Where's this pie coming from

I think people want lifestyle

They want to get outdoors and I think that

There's plenty of room for us

And for other competitors to exist

In this category

To your question though very specifically

Our relationship is with the Volkswagen Group

Rivian Technologies joint venture

It is where we are getting our software from

Which is pretty cool because it's great software

Over there updates

Snappy responsive

So you must have their electronic architecture

Going into your car

Platform that we built from the ground up

But of course we are now using this

Rivian Volkswagen Group software

Architecture

From the UX to the underpinnings of the architecture

To the integrations with the rest of the company

It underscores your earlier statement

That it's all American

Rivian technology is American

Even though it's

Paid for by the Germans

Everything's capitalized by someone

That's right

Getting to the vehicle

There are the

Traditional auto companies

That are

Getting more and more into the space

How do you convince someone

That a startup

Even though it's got great backing

Is the place

For them to go rather than

One of the guys where there's a dealership

On practically every corner

There's a lot of ways you can come at that

Right and I think

You kind of got to it

I think it comes down to trust and enthusiasm

Is how I would boil down

My answer

Trust in that

We're making great progress

We know how to build cars

We know how to get good pricing on parts

We know how to deliver upon an MSRP

These are some of the things that we leverage

The expertise of having a relationship

With a much bigger company

But then comes the enthusiasm

I think it's all new brand

Cool brand, all new products

And I've talked about a comeback story

A sales experience that is

Informational, educational

And enthusiastic, right?

The whole sum of its parts

I think brings together trust and enthusiasm

And those two things together

I think are highly motivating to customers

Two hundred thousand

Is the capability of the plant, you said

That's pretty ambitious

At least in the early years

Any thoughts of taking

Scouts brand to other markets

Right at the United States?

If you look at some of our social media comments

You certainly see a lot of handraisers

But we're very much focused

On the US, especially to start

I think like any new company

Complexity reduction, complexity reduction

Complexity reduction

And when we look around the US car market

We see tons of opportunity in these segments

Again, what we see is

Some of the biggest segments in the world

So we will get started, we will focus here

We're not taking anything off the table

We're very focused on servicing America

Doing right by our reservation holders

And winning in America

And then we'll go from there

I'm kind of fixated on the fact that

Your truck is going to be the same size

As presumably an F-150

A Silverado

And a Ram 1500

So, because that is

It's almost a closed market

And the only interloper that has succeeded

Has been Tundra, Toyota

And

So to me it's kind of interesting that there's

Now going to be a fourth American

Full size pickup

Which is kind of fascinating

You know, because

Who else has built a full size pickup

From in America?

Well, Nissan, Toyota Nissan

Nissan which was basically a failure

Right, right

But this isn't quite full size, right?

You said four and a half foot length bed

That's the width

And five foot

That's why I keep pressing

Oh, come see it

Right down the street

I think you will

If you can't tell how big it is

When you look at it in duty

Virtually come down and see it

And you'll get a good impression

That this thing is full size

It is competing with

Well, to follow up on what Joe's saying

We know that Ford had the lightning

And they, I hate to say it

Pull the plug on the lightning

I'll be here all week

I'll tip the waitress

Is that, you know

In the numbers of the Silverado

And the Sierra EVs are not great

I mean, that's

You know, you read the facts

And I'm sure you've digested them far more than I do

Concerning

Again, I won't speak to competitors

One way or the other, but I can only speak to

What I feel like we have

Which is a highly credible, cool, innovative product

And let's not forget the range

And I pin it as a game changer

And I mentioned that we saw it

From where we're

Where our reservation holders are geographically

That 50 state concept

That inside out concept we talked about

But we can also observe based on

What they're telling us, what they're currently driving

And just like we're successful in all 50 states

We're successful

Conquesting from every other power train

So we see gas people

Who probably otherwise normally wouldn't

Consider going all electric

We see them. You see definitely

Beth people who understand that for 90%

Of their use cases are EREV to them

Still behaving like a Beth

Then you see plug-in hybrid people who

Again, we're able to get them to

Traditional hybrid, so EREV

I would say is uniquely capable at winning

Every other power train and no other power train

Really does that, right? You have ICE people

Who are very reluctant to get

An electric product and you have electric people

Who don't want to go backwards and get a

Combustion product, we're able to

Thread that needle

And we see it, and I think

That's a completely different conversation

Than had we gone all electric only

Yeah, you know I'm

Really geeked about EREVs

I love the idea of one

To what you said earlier

You get the great acceleration

Smooth, no transmission shifting

Presumably one pedal drive

You've got regenerates

Of braking as well

So it drives like an EV

To get you farther distance

But I'm still curious

That's the intellectual me saying

This makes a lot of sense

But will

Traditional American buyers

Actually go for that

I still have to explain to people

How a hybrid works

And they certainly don't understand

The general public, many of them

What a PHAV is, you know

It's got a plug, but it's got a

You can fill it with gas

It's like confusing to them

Have you actually put real

Potential customers

In the seats and have them drive it

And what's been the feedback

We've researched this quite a bit

And Americans do understand what a generator is

And so this actually is

A pretty well understood concept

You take combustion energy

An engine, and you have it

Generate electricity, so they get that

And they also understand

Exactly what an EV is

Which is the torque

So by combining those two things

It's actually quite a simple thing

Which from our research

They very much understand

I have a built-in generator on board

That's producing electrical energy

Which gives me that great performance

That I love when I need it

Otherwise I can cruise around

And I can charge from my garage

And I'm fully charged

And I'm never going to the gas station

Life is great, but when I need it

So they understand it

From what we've seen

And probably the best proof in the pudding

Is our reservation results

Where I know we've publicly communicated

It's now the vast majority of our reservations

And your early adopters are probably going to be

Kind of

More well informed than your average

Person

I would assume

There's the one comment that I always get a kick out of

Which is, I know this

It's what a diesel locomotive is

Which is true, this technology has actually

Been around a long, long time

Which is that's how a many diesel locomotives work

Which is you have an electric drive

Unit powering the locomotive

For the exact reasons I said

Impressive torque, it can regenerate

You can sort of have a one

All the things that you talked about

But it's getting

Much more range and capability

From the built-in generator on board

So it's an understood concept that's been around

And customers understand

What it is an era for the people who understand it

And then maybe for the people who don't get

I mean I would argue that for

90% of

Car buyers today you could weld

The engine shut, they wouldn't know it was under there

Just as long as they got you were able to say

Okay, it does this, this and this

It's got this range, it'll go this fast

And

It will give you this kind of performance

And

Don't worry about what it is

The language we've used is

Built-in gas power generator

I think the other language we like using is

Something along the lines of EV performance

Which people get, gasoline range

Which people get, now the actual

Underpinnings and some people will definitely

Want to understand that deeply

Other people will just want to know

I can go 500 miles

And that looks cool

And it looks awesome

And it does look cool

And then you get into the next layers of it

I can off-board 240 volts

With ground clearance

Then you get into the broader value proposition

So you said

Production starts next year

27

I think you were implying late 27

For cars on sale

In early 28

We haven't publicly communicated

Exactly the details of our launch plan

But we have said it's target initial production

In 2027 and we're holding it

Who gets the first one?

Help me

Well we do have our mules cruising around now

Which aren't quite scouts

But they're the sort of

Scout architecture coming to life

For the very first time for cold weather testing

And dynamic testing

Those are cool and really sort of emotional

To see it go from that warehouse

In Dallas to now having an operational vehicle

But who gets the first one? I don't know

We gotta work on that

I imagine you have a list of the first

Ones who are going to get it

Have you targeted

The faithful who have kept the brand alive

All this time who want a new one

Now you're making me work

I don't think we have that list yet

We got more work to do

We mentioned reservations

How many reservations do you have

And how could people make reservations

So scoutmotors.com

The plug our own website

It's a really cool website

Also very educational one

And also very easy to reserve a product

And very few clicks

And a preview of how we want the sales experience

To be if you're curious to go check it out

The prior question

I missed it, one more time

How many people have reserved

Exactly, so scott has, we've publicly said

We now have over 100,000

Which we're quite excited about for a 3 year old company

Was that with a deposit?

It's a 100 dollar refundable deposit

Of people who've said

Hey, I want to get myself in line

For one

And we really value now having that

Direct connection to them

Because we do want to communicate with them

We want to learn from them

But of course, yeah, 100 dollars

Refundable deposit for a place in line

And we have over 100,000

I've got some questions from the audience

Yeah, let's hear what the audience has to say

So the first one comes from Mike Bacardi

Packaging the eRED in the rear

He calls a curious decision

And he comments on packaging the eRED

So, Sean are you Mike

Can they hear you?

Or should I repair it?

Who was the question from?

Mike the Car Geek wants to know

Why the eRED was packaged

In the rear of the vehicle

You have to go back to the beginning of scott motors

Which as you said, it started as all electric

And we fell in love with some things

We fell in love with that short front overhang

We fell in love with having a front trunk

With that really front short overhang

As you can imagine, it gets a little cozy up there

When it comes to packaging things

The ground clearance, there's no drive shaft

There's no exhaust running the whole length of the car

So yeah, there were some really, really good things

Of how we originally started to build that platform

In that architecture

And then when we made the strategic pivot to eRED

It was like, okay, what do we do?

Do we rip everything apart again and start over?

Or do we look for a smart, elegant way to package this?

And we felt very confident that we did

Have a smart, elegant way to package it in the rear

Now we have the luxury of size

Our vehicles are pretty big, length and width

So we have some real estate to play with

Smaller vehicles, don't

And we felt like we had a really viable

Really compelling technical solution

That worked without us having to

Rip apart the entire car

And if we did that, timing goes out, everything goes out

So we felt very good about the decision

And we still feel good about it

Sean, we got more?

We got a few more

Mike asked again, will the full VEV

Be available at launch?

We have not announced detail

Let me repeat the question just so they know

Mike, the geek wants to know if the full VEV

Will be available at launch

We're looking forward to announcing more detailed launch planning soon

We haven't yet

Trevor, who says he is a

Traveller EREV

Reservation holder

Says he lives in Washington and wants to know

Is there any state whose law

Does currently allow

Sales of Scout Spain flashbacks

To Curly Tesla days

Okay, and was

Trevor wants to know if there are states

That do currently allow direct sales

For Scout

Not my expertise to get into the full

Details of go to market

Legality and regulatory environment

We talked about Colorado, it looks like they've given you guys the blessing

What I will say is that we do want

To set up to be doing business

Across all 50 states in America

And we believe we have

The pathway to do that

So whether it's selling or delivering

Or servicing, little details will come

And follow, but we are confident

That it will serve as customers across America

Including Trevor and Roger

Poffron says

Did Scout think into the Detroit auto show

As concept

But I think auto shows in general

Is a good question for Scout

Great question

Poffron wants to know

Will Scout be at auto shows

We were not specifically at the Detroit auto show

We haven't launched yet

But 100%

We really loved what we did in

2025, we want to continue to show up

In real places, meeting our customers where they are

So that will sometimes mean car shows

That will sometimes mean other festivals, other events

But we want to get out there

We bring the whole team, we put a lot of our

C-suite to work at these events, because again

We want to listen, we want to feedback, we want to engage

So to answer your question, yes

Keep an eye on our events calendar

We're going to show up more places in 2026 for sure

So talk a little bit about this

So Jeep and Moab

Go together, I mean

Analogous Scout

Venue

I'm not sure

Look, I think we still have the ability

To kind of define that as we go

But what I do know is that

It's frankly, we really want to lean into

That idea of community wherever we are

We want our brand to be on the ground

Listening and responding

And talking to

Our reservation holders and people who are just curious

So we want to really physically show up

Whether it's a specific event or one event

We haven't gotten there yet

John Moore

Yeah, Joey's Cleaning Lady

What about self-directed contact?

Oh yeah, Joey's Cleaning Lady once asked

About autonomy

So

We have not announced our full

Advanced driver assistance

Suite yet, of course we will have

I would say some of the things that are expected

But it's also important to recognize

That Scouts, we want this to be a hands-on

Vehicle, right?

And there's a role to play for

Just sinning it, don't touch anything

AI is going to drive you around type of cars

And that's not what a Scout is

A Scout is, we want you to open the door

We want you to turn on the switches

We want your hands on the car

But of course that also means we want safety

We want comfort, yes, yes and yes

But this is a hands-on vehicle

And I would say that won't be a priority

On delivering something like level 4

Autonomy in a Scout anytime soon

So you're meant to drive this car

Joey also asked

What about an IPO?

Joey wants to know, IPO for the company

Maybe we don't ask

Ryan that kind of question

Or do we?

One of the things we've said is that

We're very happy to have the Volkswagen Group

As our investor

But certainly the door is potentially open

For other investors one day when the time is right

Very interesting, yeah

I've got one more for you

I have a George Rourke nature which

Is

Skeptical of

E-Rav buyers wanting to plug in

To charge their vehicles

We've seen that with P-Heds

I think that's kind of where they're going

Yeah, this is George Rourke and he brings up

A good question and we know that a lot of people

With P-Heds never bothered to plug them in

What do you think

Will Scout customers plug in their

E-Rav?

Yeah, this was, I think well

Documented last week, I think earlier this week

I have an interesting quote from a CEO

Of a major automotive company who said

Basically yeah, this is exactly this

People who drive P-Heds don't plug them in

Now a couple points on that

Our E-Rav, our all electric range is much further

So I think instead of

22, 23, 24 miles

That you see in some plug in hybrid today

Of course we have an order of magnitude more than that

So I think it naturally biases towards

More comfortable with driving

All electric and of course charging

The other thing that we can look at and clearly see

Is although there are not a lot of

E-Ravs in the market in the United States today

There are a bunch in China

And what we do see in China is that there is a

Significantly higher utilization factor or charging factor

Of people who are treating them like EVs

And are therefore charging them

Much more frequently than they otherwise

Would have charged a P-Hed

And we think that behavior will translate

To American customers as well

I would agree with you, I think that

The people who are going to buy Scouts

Are going to go in knowing it's an E-Rav

Prepared for that, it's not like

They're getting, and I will mention

Brand names like a Mercedes or a Benz

That's a P-Hed

And they got it because the dealer

Gave them a great deal, they were in a ZEV state

And they're not concerned about

Plugging in, they just wanted a nice car

Whereas I think your buyers

Are going to be very

Very intentional purchase

Correct, exactly Joe, exactly

Well summarized

So anything else Gary

Well I mean I want to, you know

Sort of wrap this up

So

You guys are working very hard

At

Creating a factory, creating a brand

Creating a product

Along the way have there been

Anything that's really surprised you

One of the most special things

Of creating a company from five people

In 2022 is culture and team

Right, and like when you get to build

A team from a clean sheet of paper

It's a really really special thing

I think what happens when you're an 80 year old company

Or however many year old company you are

You wind up just by kind of the fall

You get layers and layers of people

And management

It just sort of loses a little bit of that entrepreneurial edge

I think where Scout Motors is right now

We still have that entrepreneurial edge

Of people who want to build something

Who want to roll their sleeves up

To me that feels like once in a lifetime

Like a really cool thing to be a part of

Officially the second employee

So I feel like for a while there

I almost knew every employee that came after

I think I lost track a couple hundred to go

Now that we've crossed the thousand

But that is a really cool feeling

That is beyond the ground floor of a company

That you're building from scratch

And that's what we're doing

That surprised me in a good way

Yeah, no Ryan I think you said it best

Because who in their careers

Their automotive careers gets to start a new car company

Not many

You've got the gold and opportunity

That so many people in the industry would love to do

It's a very special thing, I feel very lucky

So Ryan Decker thanks so much

For coming on Auto Line After Hours

It's been a great conversation

Can't wait to see those things running off the line

And get a chance to drive them

Anytime you want to come see us in Novi

We can show you what a full size truck looks like

Really good

Thanks for coming on the show again

And of course I want to thank all of you

For having tuned in

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