March 4, 2026 | Does Toyota need a sixth U.S. plant?; More VW dealers sue Scout

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Welcome to Daily Drive for Wednesday, March 4th, 2026.

I'm Jake Neir in Detroit, in for Kellan Walker.

Today on the show, Hyundai invests $6 billion in robotics, AI and hydrogen in South Korea.

Subaru and Mazda post sales declines for the seventh straight month,

and two more VW dealers sue to block scout motors from selling directly to consumers.

Plus, our own Larry Velikwet lays out the clues, pointing to Toyota possibly building a sixth U.S.

assembly plant.

They just don't have that much left in their North American plants that they can utilize if

they want to do a new product.

Let's run through all the news you need to know to keep up in the auto industry.

Hyundai Motor Group is investing $6 billion in a new robotics, AI and hydrogen production

complex in South Korea. The site will produce 30,000 robots annually,

matching the capacity of Hyundai's planned Georgia robotics plant.

This includes commercializing its mobile eccentric droid, a four-wheeled autonomous

logistics wagon. The complex will also feature an AI data center and a solar-powered hydrogen

facility producing 28,000 tons yearly. More February sales results are in since we last spoke.

Subaru saw sales drop more than 8% hurt by winter weather in key markets.

That's the seventh straight month of declines for the automaker, despite the Forester hitting a

February record. And Mazda sales slipped slightly for the seventh consecutive month as well,

though the company says it was still its second-best February ever.

And two more Volkswagen dealers are suing to block scout motors from selling directly to

consumers. Volkswagen of West Islip in New York and current Volkswagen in Connecticut

filed the lawsuit Monday in federal court in Virginia seeking class action status.

The dealers say VW Group of America is breaching franchise agreements through its ownership of

Scout, which began taking reservations in October 2024. Joining me now to talk more about it is our

own Jack Wallsworth, who covers Volkswagen Group and all of its brands and subsidiaries for us at

Automotive News. Jack, welcome back to Daily Drive. Hi, Jack. Good to be here.

All right. So let's start with what the full picture sort of looks like in terms of dealership

lawsuits against Scout at this point and how this development changes anything, if at all.

What would you say? Is this a big development? Potentially, I would say. So the fact that

another lawsuit has landed, that's not necessarily like a surprise. I mean, I think

we were expecting additional lawsuits just given that we are a country of 50 states

or Volkswagen Group dealers all over the country. I think there's always going to be

multiple lawsuits. But this one is a little bit different in that it's seeking class action status.

That's something that can take some time. I talked with one of the lawyers on that lawsuit

yesterday, Len Bolivia. He said it could take up to a year. So if this lawsuit progresses,

if it reaches a point where it is certified as class action, that would be a big development.

But whether that happens or when that happens is to be determined. At the same time, it is

noteworthy that two Volkswagen dealerships, they're both on the East Coast have come out

and there are reps on this lawsuit. So the fact that more dealers are putting their name out there

or going through the legwork of filing a lawsuit is interesting. I mean, not every Volkswagen

dealer in the country is going to file an individual lawsuit, I don't think. But the fact that we're

seeing a couple more is interesting. And that's kind of a development. But again, I think we were

expecting more lawsuits. And to be honest, I would expect more to land going forward. I think

this lawsuit is pretty similar to the other ones that we've seen in other states and similar in

the arguments, I should say, dealers and dealer associations continue to say that Scout is solely

funded by Volkswagen Group. Essentially, the Scout is no different than any other Volkswagen

Group brand. They should be using franchise dealers. I think dealers continue to say,

yes, we have seen some of their brands like Tesla, Rivian, Lucid set up their own direct

consumer network, but they always point out that none of those brands have a legacy automaker behind

them. So this lawsuit has kind of similar arguments, points out that Scout has a lot of

Volkswagen Group or Volkswagen Group of American employees running things. So again,

similar but slightly different on this one for sure. Really interesting detail in your

article about this. You mentioned that VW dealers have been trying to meet directly with executives

about Scout, but they keep getting rebuffed. What are you hearing from dealers about their

strategy? If these legal challenges don't work, are they preparing for Scout to launch anyway,

no matter what? Yeah, I think it seems from my conversations that dealers are kind of preparing

for the worst. I think to be sure that dealers, dealer associations, NADA have been very clear

that they're going to fight this, and they have been fighting it. Basically, essentially,

since Scout announced that they would be going direct consumer back in October of 24,

but I think dealers are also pretty realistic. In my conversations, it kind of seems like

some dealers are accepting the fact that Scout will probably come to market, vehicles will probably

go on sale, just because, again, we're a country of 50 states, it seems plausible that one state

could potentially open the door and Scout gets selling. I don't think dealers want that, obviously,

and I'm guessing most dealers are confident in these lawsuits that have been filed and kind of

to be determined. One dealer I talked with said, I said, Scout will get figured out, it'll get

sorted out somehow. I think it'll be kind of interesting to see how that happens. Back when

Scout was awarded a Colorado dealer license back in December, I talked with the CEO of the Colorado

Auto Dealers Association, Matthew Groves, and he had said, there's basically two things we can do,

we can appeal this through litigation or see if Scout can swim. Dealers in Colorado did file a

lawsuit in January, so they've kind of gone litigation route, but at the same time, I think

his comment about seeing if Scout can swim is probably a mindset that a Volkswagen dealer might

have. Obviously, Volkswagen dealers want these products, but I'm sure they have some questions

on how the products will actually be accepted by consumers to roll out launching a new brand

is not easy, it's not like a quick endeavor. I think there's a little bit of skepticism,

but at the same time, I know every Volkswagen dealer would like to be able to sell these cars

at some point. It's a fascinating story. Jack Wallsworth is on it for us at Automotive News.

Jack, thank you so much for joining us. Really appreciate it. Anytime. Thanks, Jake.

Coming up, our own Larry Veliquette talks about the clues pointing to Toyota potentially building

a sixth U.S. plant. That's next on Daily Drive.

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Welcome back to daily drive. I'm Jake Neer. Toyota is maxed out. The automaker is running its

plants at over 90% efficiency globally with no unused production space anywhere in the world.

But demand keeps growing, especially in the US. Our own Larry Veliquette has found several clues

that point to Toyota potentially building a sixth US assembly plant, and he has a new column about

it on autonews.com. Larry, welcome back to daily drive. Jake, always great to be here.

This is a really great column. And I love that you're playing sort of detective here, Larry.

You lay out several clues that point to Toyota potentially building a sixth US plant.

What are the biggest indicators that made you start kind of connecting those dots?

Knowing this company as we do, they are maxed out globally, right? They don't have any unused

production space anywhere in the world. They are already the world's largest automaker in terms of

volume. And in the US, on the sales call back in January, the executives started repeatedly

talking about how they can't get any more. They've got the plants already running at near peak

efficiency levels. The only place that they were getting extra vehicles to meet local demand was

they're getting basically onesies, twosies, right? From China and Europe where things are slower

because of competition from Chinese automakers. So they were getting some redirected volume.

But that may not last. They have some unmet needs. I mean, I've been covering these guys for

almost eight years now, almost, yeah, going on, working up to a decade, right? I've covering

Toyota and knowing their limitations and hearing these executives talk about, yeah, we're running

super efficiently. We're not putting any incentives on yet. We're still selling

everything. Our dealers are extremely happy because they're turning everything over on their

lots every month. They're living in the promised land and they want to grow and there's room for

them to grow in demand, but not in supply. Well, there's also literal room for them to grow possibly.

Here, you identify that one of their plants that they've recently built in North Carolina,

it's only using about half of the land that they bought. Walk us through why that location

makes sense in your mind and kind of what infrastructure might already be in place there.

Yeah. So when they bought the land for the battery complex, which was their largest

single investment in North America, almost $14 billion. It was 1800 acres and they used about

half of it to build their battery complex, which is seven buildings. And of those seven

buildings, they've only actually now, they're only just starting to make the batteries

and they're only using about half of those, right? So they've got a large untapped asset.

And if you lay out on a map where Toyota has its production facilities, most of them

follow the I-64 corridor, which flows from North Carolina and it goes past near Georgetown,

which is their largest US assembly plant. And then to Princeton, Indiana,

which is where the Grand Highlander for a short time, yet the Highlander and the Lexus TX are

built as well as the Sienna and their other facilities, other assembly plants and their engine

plants, they all kind of flow not too far from I-64. This is right there. It also has the advantages

of having a rail access that they don't currently use, but which would be very helpful when you're,

when you have an assembly plant, you want to move vehicles, rail is the best way to do it.

So the infrastructure is already in place because they own the land. It's basically the cost of

the building. And by the way, having covered the search for industrial sites here where I am in

Michigan and the lack of sites that are available for this sort of thing, I mean, that's a huge deal.

It really is. And I tell you, when they chose that battery site, we did a big story at that time

to talk about how difficult it was. This was about the same time that Ford was doing its

Blue Oval project there along the Kentucky-Tennessee border. And these two projects grabbed some of

the last large land for industrial projects left. They're just not a lot remaining. And so, yeah,

it's a untapped asset or an unfully tapped asset at this point.

Let's talk a little bit more about that capacity issue that you mentioned.

You write that Toyota is running at over 90% plant efficiency. What does that actually mean

for their ability to respond to demand or add new products or things like that?

Well, they're running at 90% efficiency, and they're doing so generally without a lot of overtime.

So they're running their plants at capacity. They're very conscious not to do what say some of the

Detroit 3 do, which is if they have extra demand, they move heaven and earth to capitalize on that.

That means their workers work all kinds of overtime. They add weekends and down

near where I live, the Jeep Wrangler plant, when Wrangler demand was through the roof,

they got that plant up well over 100% capacity simply by running all these extra weekend shifts

and ignoring maintenance issues that they really shouldn't just to grab those extra sales.

Toyota tries not to do that. They're cognizant not to do that very much. So for them, 90% is

pretty darn good. They obviously run the Toyota production system, so they're always working on

efficiency. They're always chisening things to squeeze extra capacity out, but they're running up

against the functional limits of that. And in all of their plants, they just don't have that much

left in their North American plants that they can utilize if they want to do a new product,

like the one we're going to talk about in a second.

You read my mind, Larry. It does really sound like dealers want a compact pickup,

something to compete with the Ford Maverick. I was going to say the Hyundai Santa Cruz, but

RIP to that one. How big a factor is that in potentially driving a decision for a new plant

for Toyota? To understand this, you have to understand that Toyota's vehicles are built on

platforms. And so if you want to build a plant to do a compact pickup, and let's forget for a moment

how Toyota historically used to dominate compact pickups, that's what the Tacoma was

before it grew, and what the original T100, if you go back, what that was. Small pickups

is where they made their bread and butter years ago. And they've kind of seeded that

as the market all moved larger, and everybody gave it up. And then Ford went back and said,

you know what, there's volume here. And as a Maverick driver, I can attest that they are

functionally great vehicles, those size, for if you don't need a full-size pickup, or you would

like something that fits in your garage. So they think that there's a natural audience for this

vehicle for them. They've been studying it now for seven, eight years trying to figure out

what they're going to do. They originally looked at a Corolla-based one that they have

a version of in Brazil, but they decided that that was probably too small for the US market.

Now they're looking at something that would be RAV4-sized, based off the RAV4. So basically,

RAV4 with a bed. And what that does from a production standpoint, because of this platform

strategy, you can build a compact pickup, and you don't have to fill up that whole plant with

that compact pickup. You can also build RAV4s. You could add RAV4 volume or move the RAV4

plug-in hybrid from Japan to the US. The thing about Toyota is that underneath their strategy

has been, now for several decades, build it where they sell it. So if they're selling

2.5 million vehicles in the US, they want to make as many of them here as they possibly can,

because that added efficiency, that's cheaper for everybody involved, if they can build them

locally. They don't have to ship them across the Pacific Ocean. So it's a good strategy.

And if they build a pickup, the dealers that I've talked to also want, in addition to a

compact pickup, they would also like a small delivery van, which they think,

if you are already going to build a pickup, you're just talking about a little bit of sheet metal

to put a cap on it. And now you suddenly have a RAV4 hybrid small delivery van

that you can build very cheaply, which you can really do. And I'm talking about

something the size of, say, the Ford Transit Connect, right? Maybe even a little smaller.

So last mile vehicle, perfect little delivery vehicle in town, they think there's volume there too.

Now, let's talk a little bit about logistics some more. And in this case, finance is, you

know, you mentioned in your piece that Toyota has committed to $10 billion in US investment through

2030, but they've only really spent about 20% of that so far, a new plant costs usually

two to $3 billion. So the money's there. What else needs to fall in place to actually make

this happen? Yeah, a billion here, a billion there, pretty soon it's real money, right?

So they have committed to $10 billion that they did so last year to spending that. Now, generally,

to be fair, automakers constantly commit to these things going forward. And it

looks like a big number, but they're constantly spending, you know, half a billion dollars in

this plant or $800 billion between these three component plants. So there's, you know, some of

these projects are just ongoing and they happen as products, we do product changeovers, these

investments get made to accommodate changes and they come off. Looks good on a press release.

Looks good on a press release, but it's kind of, you know, operationally what they do.

Right. So this would be, you know, if they decide to do this, it could easily fit within their

spending plan. And, you know, I see benefits for a lot of different reasons. And you just,

you know, I said this before, this industry has said this for decades, you're never going to

go broke betting with Toyota or betting on Toyota, right? They just, they don't do very many dumb

things. And so I, you know, I see this as an opportunity. Now you might question, okay, why

not in Mexico because of all the free trade agreements? I think, and this is a, this is

maybe a result of the times, right, of the sensitivity to, to build it, if they're going

to build another plant, it's just as easy to build it in North Carolina. And the costs on

an ongoing basis for vehicles that are going to sell is, you know, the cost difference is pretty

minimal. Even including the labor costs. I know that that labor costs have increased in Mexico

significantly, but is, is that gap so small that it doesn't really make that much of a

difference at this point? So it's not that it doesn't make a difference, right? But you

you have other concerns in Mexico too, right? You have to get vehicles across the border.

You're dealing with, look at, look at the, the unrest down there right now, right? The chances

of, you know, North Carolina having unrest like that while still there, probably not as, probably

not as great, right? Probably not as great. So you, you know, you, you have some fixed costs and

you have a lot of the costs, the upfront capital costs that you've already done, right? And it's

just sitting there in the form of empty land. So the big concern that they are going to have

with that location, and they had it with the battery plant is simply the labor pool. Are they

going to be able, and this is, this is, you know, everywhere now, are they going to be able to find

enough workers within that regional area without driving wages up so much that they, you know,

become a negative impact on the region to be able to fill an assembly plant? Well, what I can tell

you is that if you look at what we've been writing about robots, assembly plants will have far fewer

workers a couple decades from now than they have now. Before I let you go, what have Toyota

executives said to you? I mean, you've, you've pitched me and you've convinced me, Larry,

probably members of our audience, but when you talk to executives from Toyota, what do they,

what do they say about this? So they gave me a very top of the board. I don't want to say

Pablam, right? It was simply, you know, we study this all the time. We have nothing to announce

now, right? Which is exactly what you expect them to say when you ask them a question like,

are you going to build a plant that you haven't announced? But what you didn't hear was, no,

we're not going to do it. The president did not deny blah, blah, blah. Exactly. Exactly. Yes.

All right. Well, this is fascinating, Larry, and we will be keeping our eyes on whether or not

this actually comes to pass. Really appreciate you taking the time and I will see you soon on

our weekend drive edition of the show pretty soon. Thanks for joining me. Yeah, thanks,

Jake. And I want to, I want to add to the end of the column, right? Which is,

if it doesn't happen, forget you heard anything, but if it does happen,

remember you heard it here first. Yes, absolutely. You heard it here first on Daily Drive. Thanks

again, Larry. Thanks, Jake. That's Daily Drive for today. I'm Jake Nier and for Kellan Walker.

Thanks to our own Jack Wallsworth, Hans Grimel and David Phillips for their reporting for

today's podcast. You can get the latest news on Toyota's US manufacturing footprint, lawsuits

against Scout Motors' planned direct-to-consumer retail model, and everything happening in the

auto industry at AutoNews.com. Come back tomorrow for a conversation with Bill Berman, CEO of Pinewood

AI, about the company's big plans in North America after a successful launch at NADA.

We had a huge influx of customers way exceeding, you know, our expectations out there and

everything was incredibly well received. We'd love to hear from you. Let us know what you think

of the show and the topics we covered today. Send us an email at dailydrive at autonews.com

or leave us a voicemail at 313-444-2774. And if you enjoy the podcast, remember to like,

leave a review and subscribe so you'd never miss an episode.

March 4, 2026 | Does Toyota need a sixth U.S. plant?; More VW dealers sue Scout

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