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by WILL FOLKS
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Earlier this year, crony capitalist carmaker Scout Motors – a subsidiary of über-woke Volkswagen – went in search of yet another massive, market-distorting handout from the state of South Carolina. Two years earlier, Scout received a staggering $1.3 billion in taxpayer-funded subsidies from the Palmetto State to build its massive manufacturing facility near Blythewood, S.C.
That facility has yet to produce a single vehicle for sale, incidentally.
Led by governor Henry McMaster, the state pushed this massive handout through in just twelve days, failing to heed warnings from taxpayer advocates and government watchdogs.
“Is now the right time to take such a gamble with so much of the people’s money?” noted Diane Hardy, founder of the pro-small business Mom and Pop Alliance of SC.
Hardy challenged the mad stampede to approve the huge subsidies, arguing politicians and the public “haven’t been given the time or the opportunity to hear both sides of the issue.”
“Why the rush?” she asked.
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Laird Minor of the S.C. Public Interest Foundation (SCPIF) also called for transparency regarding the Scout deal – both as it related to the company and the S.C. Department of Commerce (SCDOC), an agency with a history of opaqueness and ineffectiveness.
Sadly, McMaster ignored these voices of reason and cajoled lawmakers into plowing forward with a bad investment – one likely to leave a massive scar on our economic landscape and a massive hole in state coffers. In the intervening years, those who stood against the Scout subsidies have been proven prophetic as the nation’s electric vehicle market has collapsed.
This year’s second quarter electric vehicle (EV) sales plummeted 6.3% when compared to April through June of last year, per new data released by Cox Automotive. Cox also reduced its EV sales forecast for 2025 from 10% to 8.5% of the market, noting “the growth trajectory has been curbed.”
Even worse? This industry is poised for a full-on “collapse” in the fourth quarter – with a government-backed $7,500 consumer tax incentive and related “leasing loophole” both set to expire on September 30, 2025.
In other words, this is the absolute worst time to undertake a government-subsidized EV investment.
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RELATED | SCOUT MOTORS S.C. HONEYMOON IS OVER
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The fallout from this ongoing collapse can already be seen across the Palmetto State’s heavily subsidized EV marketplace. In May, Chinese-owned Volvo halted production at its Ridgeville, S.C. facility – blaming U.S. president Donald Trump‘s tariffs. However, subsequent reporting from FITSNews revealed the issue was actually a supply chain dispute – one further threatening the company’s already dramatically scaled back production of the all-electric EX90 sport utility vehicle.
Volvo’s $1.2 billion plant — previously hailed as a crown jewel of the state’s economic development portfolio — has consistently failed to meet production goals and employment targets. In April, prior to the supply chain snafu, 5% of the facility’s workforce was laid off.
More recently, in June of this year AESC – a Japanese-owned electric vehicle battery manufacturer – paused construction on its taxpayer-subsidized $1.6 billion facility in Florence, S.C. That plant was supposed to create 1,600 new jobs. Another AESC facility in Florence – which promised to create 1,080 jobs – was scrapped altogether in February due to reduced demand.
AESC claims it will still meet its promised target of 1,600 jobs at the original facility, but it’s not immediately clear how it intends to do so given the prevailing headwinds. Volvo, in the meantime, is moving in the wrong direction on its promise to create 4,000 jobs in Ridgeville – topping out at nearly 2,500 before beginning the recent layoffs.
Despite all of this, Scout continues to come to Columbia, S.C. with its hand out…
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Scout’s latest corporate welfare request – also pushed by McMaster – sought to give the EV maker an undeserved leg-up on its competitors by ensconcing it as the only vehicle manufacturer permitted to bypass the Palmetto State’s established dealer marketplace. The still-pending bill – H. 3777 – would allow direct auto sales in South Carolina for companies which “own and operate a manufacturing factory or assembly plant” in the Palmetto State, companies which “manufacture or assemble vehicles propelled wholly or in part by an electric motor” and companies which have “no franchised dealers in this state in the ten-year period before this item became effective.”
In other words, just Scout.
To their credit, lawmakers refused to advance the bill – prompting McMaster to now seek an end-around via the federal courts. Talk about desperation, right? You read that right: after failing to convince state lawmakers to rig the state’s auto market in favor of a woke corporation in a taxpayer-subsidized marketplace, McMaster is now trying to get the federal government to sue the state to carry out the carveout.
Specifically, McMaster’s spokesman told The (Charleston, S.C.) Post and Courier the governor hopes the U.S. Department of Justice (DOJ) will find the Palmetto State’s dealer market to be in violation of the Commerce Clause – a provision of the U.S. Constitution which allows congress to intervene in economic disputes “among the several states.”
Scout is pushing the legal challenge – further proving its ability to make good on the lofty promises accompanying its $1.3 billion handout is wholly dependent on this market-distorting carveout.
Which, incidentally, is now dependent on a threat against the state…
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Scout is clearly desperate – caught in a downward market spiral that could very well take down an entire industry. Its tactics are also growing increasingly tiresome to its erstwhile supporters, many of whom are making it clear the company’s free ride has come to an end. Several lawmakers who supported Scout’s 2023 handout have privately told FITSNews they regret their votes – and are not inclined to do the company any additional favors.
This latest fiasco involving Scout raises several key questions…
Why is South Carolina continuing to fund this project? Could Scout Motors’ Blythewood facility be the Palmetto State’s next multi-billion dollar command economic boondoggle? Why is McMaster so insistent on doing Scout’s bidding? Is yet another costly economic development failure to be his legacy?
Also… how did McMaster, who has never accomplished much as a businessman, so badly misread the writing on the wall regarding the EV market? How did he miss a widespread economic collapse that even low-rent tarot card readers could see coming a mile away?
As the media outlet which exposed Scout’s latest scam, count on FITSNews to keep our audience apprised as we seek answers to these important questions…
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ABOUT THE AUTHOR…
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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20 comments
Will, I thought you were in favor of the free market? Why aren’t you calling for all vehicle manufacturers to be able to sell their products in SC regardless of whether it’s through a dealership or not?
The free market only works if it actually is a FREE market without government intervention and legislators spending OPM (other people’s money) to pick winners and losers!
For those who don’t get the economics thing, I highly recommend ECONOMICS101, it’s free from HillsdaleCollege.edu.
Aren’t the pre-existing and anti-competitive dealership laws in SC that Scout is fighting in and of itself a form of government intervention that’s hindering the free market?
Before you make condescending comments about others needing ECON lessons, maybe look in the mirror first.
Will wants SC to go back to the days of picking tobacco and cotton.
Jackass comment.
Has Scout Motors hired any US citizen managers? They advertise many, but from what I’m hearing they’re not hiring any locals for management positions.
Ford is going bankrupt. BMW expected to scale back on production and lay off 25,000 US employees. Container freight is expected to drop at State Ports
Dozens of members of the State Legislature suspected of getting kickbacks from Scout.
The transplant invasion of a species with two legs from blue states are deranged, nasty, rude, pretentious worms.
Anyone else remember the Mack Truck plant? I believe we’ll see a repeat with Scout Motors.
Please remember that Scout (a loose subsidiary of volkswagon) has not taken possession of the site or the project and they dont have to if the state of sc doesnt hit certain milestones.
This boondoggle is 100% still with the taxpayers. It wont officially fail until after HM is out of office. The site will end up data centers and warehouses.
The same crack team of commerce contractors brought you this one as brought the Carolina Panthers to SC. Oh wait….
We really need politicians that make an average salary between $40k-$60k so taxpayer money is spent more wisely. What a joke to make an investment in something that has little demand like EVs.
Money laundering scheme.
How is the SCADA pumping funds to legislators to keep their cut of every car sale in the state not crony capitalism? I’m not for a carveout for Scout…I’m for ending the block on direct sales all together.
50,000 pre-orders for a vehicle slated to roll off the line in 2027. Scout will do just fine. Definitely better than the Foxconn deal that Donnie dumped on Wisconsin.
Wow, you know so much! ? Could you please talk at me some more about how Scout Motors is treading upon the free market rights of car dealers? Preferably while your wife watches. Your insight has me ready to make a snail slime trail all the way from my cabin in New Hampshire.
Do you think legacy industries, like fossil fuels, haven’t gotten their fare share of public money? I’m OK with Scout taking a handout from an otherwise politically and socially retrograde state to move the EV transition forward. Blue states have offered public money to EV makers, too.
I imagine Will’s great grampy was shaking his fists at those new fandangled horseless carriages too.
This Scout Motors deal was crap from the beginning. If it needed corporate welfare from the onset, not a viable deal. This is why business needs to take care of business and government needs to govern. Stay in your lane.
Early October this money was Given for more than 270 Jobs! “”” Henry McMaster
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Another big day for South Carolina as Pratt Industries in York and Carolina Renewable Products in Orangeburg announced a combined $372 million in new investment and more than 270 new jobs!””” That is $1,377,777.78 Sent per Job!! That is TOO Much of or Tax Dollars for TOO little Return! How about Invest in Small Businesses (mom and pop) Instead! $100,000.0 Per Small Business sounds Much Better as Most Small Businesses employs at least 4 People on average!!