South Carolina offers $1.3bn to new Scout electric SUV maker

South Carolina's governor said on Monday he is going to ask lawmakers to approve nearly $1.3 billion to bring to the state a new electric vehicle plant by a Volkswagen-backed group trying to revive a brand that was a 1960s forerunner to today's SUVs.

Scout Motors and South Carolina officials announced plans to start building new Scout vehicles, powered this time by electricity, for the first time since 1980. They hope to hire 4,000 workers for its $2 billion plant.

Scout is banking on nostalgia combined with an expected boom in electric vehicles. International Harvester made petrol-powered Scout vehicles in the 1960s and 1970s. Their shape and features continue to influence modern SUVs and Scouts have had a niche fan base of collectors ever since.

In the competitive fight to land electric vehicle plants, South Carolina is trying to join its neighbours in providing billions of dollars in taxpayer help.

Georgia offered Hyundai $1.8 billion in incentives for its first US electric vehicle plant near Savannah.

North Carolina appears to be offering Vietnamese car maker VinFast more than $1 billion in help for its first North American electric vehicle plant.

South Carolina is determined to be a big player in the electric vehicle industry and all the things that go along with it, like making batteries.

Governor Henry McMaster signed an executive order in October asking the state Commerce Department to aggressively court businesses involved in the industry and give them one point of contact.

That appeared to work on Scout. Company officials said they wanted to act fast. They reached out to 74 potential sites across the country and South Carolina sealed the deal in two months, Scout Motors president Scott Keogh said.

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“Some states were still shuffling paperwork after 60 days. This state had action,” said Mr Keogh, who also is chief executive of the independent company headquartered in Virginia and backed by German car maker Volkswagen.

Scout's new plant would be built north of Columbia. Groundbreaking and site work could begin this summer and the company hopes to have 4,000 workers and vehicles rolling off the assembly line by 2026, Mr Keogh said.

When fully running, Scout Motors hopes to be making 200,000 vehicles a year, exporting them around the world.

The $1.3 billion in state help would go towards building a new interchange for the plant and a railway bridge over the motorway. There would be other improvements to sewer, power and roads as well as grants the company could use for whatever it wishes to get the venture off the ground, South Carolina Commerce Secretary Harry Lightsey said.

The state General Assembly will need to approve the incentives. Leaders in the Republican-dominated House and Senate appear to fully back the project.

Mr McMaster said, adjusted for inflation, the investments made by states in foreign car makers that started making vehicles in the US in the 1990s were similar.

“They always have said you have to spend money to make money,” Mr McMaster said. “Time has proven those are wise decisions.”

Mr Lightsey compared Scout Motor's attempts to bring a brand with nostalgic ties and backing from an established car maker into the new electric vehicle industry to Japanese car makers in the late 1980s introducing the luxury Lexus and Infiniti brands.

“This is a unique moment in history,” Mr Lightsey said, calling Scout's business plan “bold” several times. “As we started to understand the company’s vision, we realised what a match this was for the state of South Carolina.”

Scout Motor's decision to build near Columbia means each region of the state will have a major car maker.

BMW has been building vehicles near Greenville since 1994 and is investing $1.7 billion to prepare to make electric vehicles there. Volvo Cars began making vehicles at a plant near Charleston two years ago and also plans to begin converting to some electricity powered models.

Mr McMaster said it is important to spread economic development across all areas of the state.

“This is the missing ingredient that is going to set a spark of prosperity in the Midlands,” the governor said.

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