Volkswagen’s Scout unit wins $1.3 billion in incentives for South Carolina factory

By David Shepardson

(Reuters) – South Carolina Governor Henry McMaster on Monday signed legislation approving $1.29 billion in state incentives for Volkswagen (ETR:)’s off-road brand Scout Motors to build a $2 billion manufacturing plant for trucks and SUVs.

The project could also receive up to $180 million in job development tax credits based on hiring, said South Carolina Commerce Secretary Harry Lightsey.

In May, VW said it would reintroduce the Scout off-road brand in the United States, offering new electric pickup and sport-utility vehicles. Scout said it hopes to eventually create 4,000 jobs and produce 200,000 Scout vehicles annually.

Groundbreaking is planned for mid-2023 and production is projected to begin by the end of 2026.

“We looked at 74 sites in a dozen states, roughly,” Scout CEO Scott Keogh told reporters. “The site was ready, the governor himself put together an EV council … to make sure his state was ready.”

Keogh said Scout wants to “act like a startup, be nimble and take advantage of this moment.” Scout, an independent U.S. company owned by Volkswagen Group, has said it is evaluating the potential for outside investment but has made no announcements.

Volkswagen has moved away from cars in the United States. SUVs now account for about 80% of U.S. sales of the group’s VW and Audi brands. VW last sold a pickup in the United States in the early 1980s.

Scout and Travelall vehicles made by International Harvester were forerunners to the popular SUVs from Detroit’s Three automakers such as the Ford Bronco and General Motors Co (NYSE:)’s Chevrolet Suburban.

Volkswagen first disclosed it was considering using the Scout name late in 2021. The automaker’s Traton business acquired U.S. truck maker Navistar (NYSE:) in 2020, which owns the name.

Monday’s event was the latest major auto announcement for South Carolina, home to BMW’s U.S. operations and its largest plant by volume. The state also has over 500 automotive-related companies and 75,000 automotive industry employees.