VW to challenge Rivian, Ford with electric Scout SUV

HAMBURG/WASHINGTON, (Reuters) – Volkswagen (VOWG_p.DE) plans to reintroduce the Scout off-road brand in the United States offering new electric pick-up and sport-utility vehicles (SUVs), the German automaker confirmed.

The German carmaker would invest around 100 million euros ($106 million) in the new Scout brand, two people briefed on the matter said.

VW said it will create a separate, independent company to build the Scout starting in 2026 that will be designed, engineered, and manufactured in the United States for U.S. customers.

Sources told Reuters VW could potentially seek external funding through investors or an IPO to expand its production capabilities.

VW Group Chief Executive Herbert Diess said “electrification provides a historic opportunity to enter” the U.S. pick-up market and underscores VW’s “ambition to become a relevant player in the U.S. market.” VW last sold a pickup in the United States in the early 1980s.

The company said it is a key part of its goal of reaching 10% U.S. market share.

Volkswagen has moved away from cars in the United States as it adds more electric models. SUVs now account for about 75% of the U.S. sales of the group’s VW and Audi brands, which represent about 4% of U.S. auto industry sales. U.S. sales of the two brands were down about 30% in the first quarter.

Scout and Travelall vehicles made by International Harvester were forerunners in both function and style of popular SUVs from the Big Three Detroit automakers such as the Ford Bronco and General Motors’ (GM) (GM.N) Chevrolet Suburban.

Harvester stopped building the Scout and Travelall in 1980 after the oil price shocks of the mid-1970s as it went through a restructuring.

But the Scout “look” lives on in vehicles such as Ford’s (F.N) current Bronco and electric vehicle (EV) startup Rivian‘s (RIVN.O) R1 pickup and SUV line.

The Wall Street Journal reported on Tuesday that Volkswagen hoped to eventually sell up to 250,000 Scout-branded vehicles annually in the United States.

Volkswagen first disclosed it was considering using the Scout name late last year. The automaker’s Traton SE business acquired U.S. truck maker Navistar in 2020, which owns the Scout name.

GM in 2020 said it would resurrect the Hummer name to build electric SUVs and pickup trucks and through March 31 has delivered 100 Hummer EV pickups in the United States.

($1 = 0.9477 euros)

Reporting by Jan Schwartz, David Shepardson Writing by Victoria Waldersee Editing by Jane Merriman, Mark Potter, Kirsten Donovan