VW considers hiring Foxconn to manufacture for Scout

Volkswagen now apparently favours external production for the US electric car subsidiary Scout. According to a media report, the company is in talks with the contract manufacturer Foxconn about a plant for the new Scout brand.

++ This article has been updated. Kindly continue reading below. ++

This was reported by the German publication Automobilwoche with reference to company circles. At the same time, VW is also negotiating with Magna. The talks are not only about a development cooperation for the planned Scout electric pickup, as initially assumed, but also about a possible production. In the past, Magna itself had emphasised that it wanted to become more active on the US market – the Volkswagen Group could be a suitable customer.

The plans for the Scout electric vehicle subsidiary for the US market were confirmed by the Volkswagen Group in May this year when the supervisory board gave its approval. At that time, Herbert Diess was still chairman of the board in Wolfsburg, but the current VW CEO Oliver Blume also seems to support the plans. In May, it said the vehicles would be “designed, developed and produced in the United States for US customers”, with a planned production start in 2026.

Unlike Magna, Foxconn already has an e-car plant in the US: the Taiwanese company took over the former GM plant in Lordstown, Ohio, from Lordstown Motors, and Foxconn has been building the Lordstown Endurance there since September. The Fisker Pear is also to be built at the plant from 2024. However, it is not known whether there would still be enough production capacity for Scout with the existing orders and what quantities the VW Group is planning on.

According to the circles quoted in the report, it is unlikely that VW will build a factory for the production of the Scout electric cars next to the existing Chattanooga plant. Blume is also apparently pursuing a different course than his predecessor Herbert Diess with regard to the planned e-car plant in Wolfsburg-Warmenau.

Automobilwoche still mentions Audi’s plans that they are “eager for a group-owned plant” in order to be able to build their own e-cars in the USA. However, it is unclear how many synergies would result between the electric Audis based on PPE or SSP and the Scout off-road models on their own platform.

Update 15 December 2022

The Volkswagen Group’s considerations to engage Foxconn as a contract manufacturer for the US electric car brand Scout could fail due to workers’ resistance. As reported by the German publication Manager Magazin, during a discussion in the supervisory board, employee representatives expressed doubts about the possible deal. According to the headline of the article, the deal is apparently already “on the brink of collapse”.

Although Foxconn offered by far the lowest production costs per vehicle, it was doubted whether these would really remain so low. Concerns were also expressed about whether Foxconn’s inexperienced car manufacturing staff, unlike Magna’s manufacturing experts, could be expected to cause costly delays and quality defects in the long run. “Does it really make sense to introduce a possible future competitor like Foxconn to the depths of car production through such a project?” The question of whether one is “not getting involved too lightly with a partner from China or Taiwan” is also open to debate.

In principle, however, the supervisory board did not shake the decision of former group boss Herbert Diess to revive the Scout brand in all-electric form. Only the how was discussed: The board had finally been left “with the task of reworking”. Among other things, Magna was subsequently given the opportunity to improve its offer once again. Also, an own production in the USA is being seriously considered again. A decision is to be made in January.

automobilwoche.de (in German), manager-magazin.de (update, in German)