Volkswagen (OTCMKTS:VWAGY) is apparently gearing up to reintroduce its Scout line of off-road trucks, this time as electric vehicles. The move comes as part of VW’s efforts to expand its U.S. presence with a brand designed for release in the states. Volkswagen stock is up on the news.
The Wall Street Journal reported that the European automaker is planning to launch both an electric SUV and an accompanying pickup truck to make up its new Scout brand. Should the plan come to fruition, it would be the first time VW releases a new brand based in the U.S.
Volkswagen is seemingly attempting to break into the U.S.’s highly profitable truck and SUV market. This makes sense for a number of reasons. Given the currently uncertain state of both European and Chinese markets, adding market share in the U.S. could prove a strong benefit to the company. Additionally, VW’s sales in the U.S. fell dramatically in the first quarter of 2022, so today’s news may come as an attempt to regain its American foothold. Indeed, VW owns just 5% of the U.S. auto market, despite being the second-largest car maker in the world.
The move would position VW as a direct rival to U.S. off-roading mainstays like Ford (NYSE:F) and General Motors (NYSE:GM). VW would also be competing with massive electric vehicle startups like Rivian (NASDAQ:RIVN). As per recent reports, VW would like to sell around 250,000 Scout vehicles a year in the U.S. once production, currently estimated for 2026, begins.
Volkswagen Stock Climbs on EV Truck News
Investors are clearly pleased with the latest VW rumors. VWAGY is currently trending up more than 2% as analysts ponder a U.S.-based EV truck line from the likes of Volkswagen.
While its overall market share is lower, Volkswagen actually outsells its combustion-first rivals in the U.S. when it comes to EVs. The Wolfsburg-based auto group owns 8% of the rapidly expanding U.S. EV market. Clearly the company is interested in further increasing its presence in North America. Given its historic success in the field, this is reasonable. The Scout line will apparently be designed, built and largely sold in the U.S.
The Scout was originally an acknowledged rival to the likes of the Ford Bronco, Land Rover and Jeep. From the 1960s-1980s the Scout was a beloved auto brand alongside other VW subsidiaries. The company reacquired rights to the Scout brand when it bought Navistar International in 2020.
There remain many unknowns related to VW’s latest revitalization. Rest assured, investors will be watching the auto group closely as it continues to pursue it’s once-beloved off-roading line.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.