Volkswagen to build $2 billion Scout Motors plant in South Carolina

Facility to employ 4,000 workers making EV trucks, SUVs

FILE - This Thursday, Feb. 14, 2019, file photo, shows the Volkswagen logo on an automobile at the 2019 Pittsburgh International Auto Show in Pittsburgh. (AP Photo/Gene J. Puskar, File)
FILE - This Thursday, Feb. 14, 2019, file photo, shows the Volkswagen logo on an automobile at the 2019 Pittsburgh International Auto Show in Pittsburgh. (AP Photo/Gene J. Puskar, File)

Volkswagen plans to build a $2 billion factory in South Carolina capable of producing 200,000 electric vehicles per year under VW's new Scout brand.

South Carolina Gov. Henry McMaster announced Friday that VW had picked a 1,600-acre site just north of Columbia, South Carolina to build the new plant, which he said will ultimately employ 4,000 workers and could bring thousands of other jobs from automotive suppliers located nearby.

"Scout Motors will provide thousands of South Carolinians with previously unimagined opportunities and prosperity for generations to come," McMaster said in a statement. "The Palmetto State, with its rich history, superior people and sterling automotive manufacturing reputation, is the perfect place to restart this iconic American brand."

Scott Keogh, the president and CEO of Scout Motors, said the South Carolina plant will "usher in this new era for Scout," which Volkswagen acquired in 2021 when it purchased Navistar, the corporate successor of the company once known as International Harvester.

Headquartered in Tysons, Virginia, Scout was formed to craft all-electric trucks and SUVs built on the Scout brand that became an American icon when it debuted as the first sports utility vehicle in 1960.

"Today, we're reimagining Scout's original ingenuity and electrifying its future," Keogh said Friday in an announcement of the new U.S. plant. "We're bringing the Scout spirit to South Carolina, and it's going to be a hell of a ride."

Keogh previously oversaw VW's assembly plant in Chattanooga as CEO of Volkswagen Group of America before he took over the Scout brand in January. Volkswagen's only other U.S. assembly plant is at the Enterprise South industrial park in Chattanooga where VW makes the Atlas SUV and the all-electric ID.4 SUV under the Volkswagen brand.

The VW assembly plant's sprawling Enterprise South industrial park location still has hundreds of acres set aside to accommodate future manufacturing of vehicles or supply chains for VW, including the possibility of another auto assembly plant. Although VW picked South Carolina for the Scout plant, Chattanooga could still be a site for future battery and vehicle production.

Reuters has reported Volkswagen is looking at expanding its existing Chattanooga factory to produce the electric ID.Buzz, the successor of the once-popular Microbus.

Keogh said the 2022 Inflation Reduction Act provided extra incentives to commit to building cars and trucks in the United States.

"We think it's important to manufacture in America, certainly without a doubt, the Inflation Reduction Act, combined with what the states are doing, make it a smart time to buy versus rent," Keogh told the online news service Tech Crunch on Friday.

Scout will reportedly receive support from the South Carolina government, but the incentives package was not disclosed Friday.

Keogh said the decision to locate in South Carolina came down to many factors, including an existing infrastructure for the automotive industry and what Keogh called an "extremely strong port." The port of Charleston, which is about two hours from Columbia, is the eighth-largest in the United States.

Scout Motors will be the second German automaker to locate in South Carolina. BMW has a manufacturing facility near Spartanburg, South Carolina which employs nearly 11,000 workers.

Scout trucks and rugged SUVs will be built on a newly designed all-electric platform, Keogh said. Vehicle production is targeted to begin by the end of 2026, McMaster said.

Scout Motors is an independent U.S. company, owned by the Volkswagen Group, with its own board of directors, including Dr. Gernot Doellner, head of group strategy at Volkswagen AG, and Peter Bosch, a member of the Bentley Motors board for manufacturing. Scout is currently evaluating the potential for outside investment.