This article first appeared on GuruFocus.
Volkswagen AG (VWAPY) is making a calculated bet that the next leg of its US comeback may not start with a battery but with a gas tank. Scout’s revival, once imagined as a pure EV sequel to the classic American truck line, is now being rebuilt around gasoline-electric hybrids after more than eight out of 10 reservation holders opted for plug-in or extended-range variants. In the US market, where EV demand softened last year, the pull toward EREV setupscapable of roughly 500 miles on a blended tank-and-battery runcould be signaling investor-relevant consumer caution around pure-electric range anxiety. Even electric pickups such as Tesla (NASDAQ:TSLA)’s Cybertruck have struggled to build durable buyer momentum, while General Motors and Stellantis have already trimmed their own electric-truck plans. Scout CEO Scott Keogh said the company could look at canceling its Terra pickup if the segment fails to gain traction, though he emphasized the brand is not making that call today.
A policy shift in Washington is feeding directly into this pivot. President Donald Trump and Republican lawmakers are working to unwind what they describe as an EV mandate by eliminating the $7,500 federal consumer credit and weakening fuel-economy and emissions rules. The result has been a surge in gas-heavy SUV sales while EV volumes fall, reshaping demand patterns just as VW prepares Scout’s return. Keogh said he will not cut $7,500 from the roughly $60,000 starting price of the Traveler SUV and Terra pickup to offset the credit loss, adding that the brand possibly does not need to make that concession. When Scout hits the market in late 2027, it could represent VW’s attempt to reenter the US with a product positioned directly inside the most profitable segments, echoing Scout’s mid-century roots after VW acquired the lineage through Navistar in 2021.
VW is placing long-horizon capital behind the strategy, from a $2 billion South Carolina factory set to begin production in late 2027 to a newly announced $300 million, 200-acre supplier park next door. Over the past year, Scout has collected more than 130,000 non-binding reservations, with about 73 percent skewing toward the SUV over the pickup. Keogh says the brand’s timing could align with Americans’ preference for locally built vehicles, a trend potentially strengthened by Trump’s America-first industrial focus. He also argues the loss of the tax credit affects Scout for only about four years since it was previously set to expire in 2032, and that VW is making a 50-year call rather than optimizing around incentives that may or may not exist. Audi could eventually share the platform at the South Carolina plant, though nothing has been confirmed. For now, VW is positioning Scout to compete directly in segments that account for roughly 40 percent of US auto-industry profitsan opening the company has been trying to capture for decades.
