BUSINESS

Corporate Cronyism: Controversial EV Carveout Raises Red Flags

More market distortion from Scout Motors…

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South Carolina placed a huge bet on electric vehicles at the absolute worst possible time – dropping a staggering $1.3 billion in crony capitalist subsidies on a new division of über-woke Volkswagen at a time when the EV market was beginning to show signs of fundamental weakness.

The infamous Scout Motors deal – approved in 2023 – has all the makings of a command economic disaster. That’s why it wasn’t surprising to learn this woke corporate welfare recipient is already back before the S.C. General Assembly with its hat in hand seeking additional preferential treatment.

Last Thursday (January 16, 2025), a bill was introduced which would grant Scout a special marketplace carveout – one not available to other auto manufacturers – purportedly under the guise of encouraging “freedom,” “entrepreneurship” and enhancing “consumer rights.”

“The citizens of South Carolina value individual liberty and the right to make informed choices regarding the goods and services they consume,” the legislation noted, adding “excessive government regulation can stifle innovation, increase costs, and limit consumer options, thereby hindering economic growth and prosperity.”

That’s true… much in the same way rampant crony capitalism is actively hindering growth and prosperity in South Carolina (especially among small businesses).

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It’s also true a “free market economy, characterized by competition and consumer choice, best serves the interests of South Carolina’s citizens,” as the bill noted.

But is a free market really “free” when a company which was already gifted a $1.3 billion taxpayer-funded head start on its competition receives special permission to rig the market even further? At the expense of tens of thousands of jobs?

The legislation in question – H. 3777 – would permit manufacturer-direct sale of motor vehicles in South Carolina. Well… some motor vehicles. And more specifically, one brand of them.

To qualify for this carveout, your company must “own and operate a manufacturing factory or assembly plant” in the Palmetto State, one which “manufactures or assembles vehicles propelled wholly or in part by an electric motor” and which has “had no franchised dealers in this state in the ten-year period before this item became effective.”

Yeah… that’s not the “free market,” people. Nor is it “consumer choice.” Nor is it “encouraging entrepreneurship.”

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Scout Motors’ facility under construction in Blythewood, S.C. (Scout Motors)

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That is yet another crony capitalist giveaway to Scout Motors – additional corporate welfare on the backs of existing businesses.

How do we know this? Because the only vehicle manufacturer qualifying for this bill’s carefully worded carveout is Scout Motors, which frankly raises a lot of additional questions about the massive $1.3 billion bet lawmakers placed on them with your money.

Seriously, Scout’s Blythewood, S.C. plant hasn’t even opened yet… and its lobbyists are already begging for more favors from lawmakers?

That doesn’t bode well at all…

Count on FITSNews to track the progress (or, hopefully, lack thereof) of this legislation as we continue our reporting on this unfolding command economic debacle.

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ABOUT THE AUTHOR …

Will Folks on phone
Will Folks (Brett Flashnick)

Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.

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4 comments

CongareeCatfish Top fan January 21, 2025 at 1:46 pm

It’s not going to end with this new push by Scout. The EV industry as a whole has been experiencing major contraction in demand. Almost all EV makers have scaled back production, and the ones that still make gas powered vehicles (Ford, GM, VW, etc.) have shifted resources from EV production back to ICE production. Massive seller concessions are being made to move the glut of EVs on the dealer lots out of inventory – particularly the EV trucks. It seems that Scout wisely shifted some of their planned plant capacity from EV back to ICE, but the question will be if they have to come back with their hat in their hand because they can’t sell the EV product line.

Reply
Squishy123 (the original) January 21, 2025 at 11:08 pm

Word I’m hearing is they have yet to hire one local person in a management role.

Reply
Brian Painter Top fan January 22, 2025 at 8:52 am

Law seemed fine in the beginning… direct sales to consumers if you have a manufacturing/assembly plant in the state. After that it went off the rails, and the laws true colors show through.

Reply
EVs blow January 28, 2025 at 9:34 pm

Scout/VW not even using lube on this one

Reply

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