South Carolina lawmakers are considering a new bill that would finally allow direct-to-consumer electric vehicle (EV) sales. At the heart of this discussion is Scout Motors, a Volkswagen subsidiary that is investing $2 billion in an EV manufacturing plant in the state.
Despite the state’s commitment to attracting Scout with a $1.3 billion incentive package, current laws prevent the company from selling its vehicles directly to South Carolina residents.
The Current Roadblock
South Carolina law mandates that all new vehicles be sold through franchised dealerships, a structure that has been in place for decades. However, companies like Tesla, Rivian, Lucid, and now Scout Motors have embraced a direct-to-consumer sales model, which they argue provides a more transparent and efficient purchasing process.
If the law remains unchanged, South Carolinians, including the 4,000 workers expected to be employed at Scout’s new facility, will have to travel to neighboring states to buy the very vehicles they help build.
This policy has drawn criticism from industry leaders and consumers alike. Cody Thacker, Scout Motors’ vice president of growth, emphasized that the law is outdated and limits consumer choice. He pointed out that direct sales eliminate the middleman, reducing vehicle prices and allowing manufacturers to offer a more seamless experience.
A Push for Change
In response to mounting pressure, a bipartisan group of lawmakers has introduced the South Carolina Consumer Freedom Act, a bill aimed at revising the state’s dealership laws. If passed, the legislation would allow EV manufacturers without existing franchise agreements to sell directly to consumers, with the bill garnering support from six co-sponsors.
Governor Henry McMaster has already signaled his support for the bill, marking a potential turning point in the debate. In a recent interview with South Carolina Public Radio, McMaster said he would sign the bill to allow direct-to-consumer EV sales if it landed on his desk.
The Opposition from Dealerships
Despite its potential benefits, the bill, unsurprisingly, faces strong opposition from South Carolina’s dealership associations. Representing more than 280 franchised dealers, these lobby groups argue that direct sales threaten the traditional dealership model. They contend that eliminating dealerships could reduce competition and lead to higher prices in the long run.
Additionally, the lobby group argues that dealership owners have invested millions into their businesses and fear that allowing direct sales would undermine their financial stability.
What’s Next?
For now, the bill awaits further debate in the House Labor, Commerce, and Industry Committee. If lawmakers fail to act, South Carolina risks sending a contradictory message—welcoming EV manufacturers with massive incentives while simultaneously blocking them from selling their vehicles directly to consumers.
