Jul 19, 2022 - Economy

Scoop: VW turns to electric Scout brand to win back Americans

Image of Scout CEO Scott Keogh with a vintage Scout SUV

VW exec Scott Keogh will lead the revival of Scout as a rugged electric truck and SUV brand. Photo courtesy of Volkswagen

Volkswagen's plan to roll out a new line of sporty electric trucks and SUVs under the resurrected Scout brand is a rare chance to win back Americans' hearts, Scout's new boss tells Axios in an exclusive interview.

Why it matters: Despite its global standing as the world's second-largest carmaker, Volkswagen is a chronic underachiever in the United States. Admitting in 2015 that it had been cheating on diesel emissions standards only worsened its reputation.

  • Now, amid a historic shift to electric vehicles (EVs), VW sees an opportunity to reconnect with U.S. consumers by offering EVs in the segments they care most about: pickup trucks and large SUVs.

Driving the news: Scott Keogh, president and CEO of Volkswagen Group of America, will become president and CEO of Scout on Sept. 1, Axios is first to report.

  • He will be succeeded by Pablo Di Si, currently the executive chairman of Volkswagen's South American Region. Di Si will oversee the entire North American region, as did Keogh.
  • The leadership change was approved by Volkswagen AG's management board, which is meeting this week in Chattanooga, Tennessee — home to the German automaker's growing U.S. manufacturing base.

What they're saying: "It's time now to concentrate more on the U.S. market and the U.S. customer, and one piece of the puzzle, for sure, is Scout," Volkswagen Group CEO Herbert Diess said while chauffeuring me in one of his company's first U.S.-built EVs, the ID.4 compact SUV.

  • Between Scout and further growth of the Volkswagen and Audi brands, the VW Group aims to double its U.S. market share, which currently stands at about 5%.
  • "America is probably the country where we have the biggest potential worldwide," Diess told me.

Details: Scout will be an independent U.S.-based company, which will allow it the flexibility to take on partners or other investors — or even go public some day, Volkswagen execs said.

  • Scout will develop what the company calls a “true American” electric SUV and pickup truck designed for rugged, off-road use.
  • With a dedicated engineering platform, Scout expects to provide new conveniences and connectivity to meet different needs, like camping, off-roading or work site use.
  • The hope is that the iconic Scout name can help the company penetrate the highly profitable American market for big SUVs and pickup trucks, which is currently dominated by U.S. brands like Ford, Chevrolet, Jeep and Ram.
  • Production will start in 2026, and the aim is to sell up to 250,000 Scout-branded vehicles annually in the U.S.

Flashback: The Scout was developed in 1961 by International Harvester as a precursor to the modern SUV.

  • It was marketed as an all-terrain family recreational vehicle and eventually came in several body styles, competing with Land Rover, Jeep and the Ford Bronco. Production ended in 1980, but Scout SUVs remain popular with collectors.

The back story: The rebirth of Scout as a rugged EV brand was a fortunate accident for Volkswagen.

  • The company acquired the rights to the Scout brand name in 2021 when its commercial vehicle subsidiary, Traton, bought truck manufacturer Navistar International (the successor to International Harvester, which went out of business in 1985).
  • Keogh, on a trip to the beach with his kids, came across a fully restored Scout and fell in love.
  • When he realized "the rights to the brand were just sitting there," he started advocating for a new electric truck line.

The bottom line: As VW sees it, electrification is a once-in-a-lifetime opportunity to redefine itself.

  • "Electrification, to me, is a reset," says Keogh.

Editor's note: This story has been corrected to note that Traton’s acquisition of Navistar International was completed in 2021, not 2020.

Go deeper