Scout Motors’ plan to bypass traditional dealerships and sell electric vehicles (EVs) directly to consumers is facing legal challenges.

A group of Volkswagen and Audi dealers has filed a lawsuit against Scout Motors, the EV that spun out of Volkswagen. The lawsuit, first reported by Automotive News, seeks to block Scout’s direct-to-consumer sales retail model.

Dealerships have long fought against EV startups, including Tesla, from adopting the direct-to-sales model with mixed results. Now, the focus is on Scout, which is not expected to begin producing EVs until 2027.

The California New Car Dealers Association issued a cease-and-desist letter to Volkswagen and Scout Motors in December 2024, claiming that direct sales violates state law. Dealership groups in other states, particularly in Florida, are also attempting to prevent Scout from selling directly to consumers.