Scout Motors continues to generate new economic activity in S.C.
March 3, 2023
Scout Motors
On March 3, 2023, Scout Motors and its parent company, Volkswagen AG, announced plans to build a massive $2 billion, 4,000 employee manufacturing facility in Blythewood, South Carolina, resurrecting the iconic Scout brand as a new line of all-electric rugged off-road SUVs and trucks.
The announcement is the largest in the greater Columbia, S.C., region’s history, and it ranks among one of the largest historic deals in South Carolina. It is also a significantly transformative investment for the local community, as what has been long hailed as a government and university town will be impacted immensely by the revolution of the electric vehicle industry.
The story of “Project Connect” began with the largest automaker in the world, Volkswagen AG. In October 2021, the company acquired International Trucks’ parent, Navistar, in a $3.7 billion deal. As part of that acquisition, VW gained the company’s iconic brand, Scout, but originally overlooked its value. Scout was manufactured in Fort Wayne, Indiana, from 1960 until it was discontinued in 1981, and hallmarked as America’s original heavy-duty, off-road SUV.
Sales in the North American market – which represents as much as 33% of VW’s overall sales – are an essential component of the company’s global success. Considering the market share of trucks and sports utility vehicles in the United States, VW launched its vision to enter the market with a new all-electric brand. From within stacks of documents from the acquisition, one employee in VW’s planning group spun out the idea of relaunching the Scout brand.
Scout Motors was formed in 2022, kickstarting the process of determining how best to design, manufacture and market this new product. VW originally considered outsourcing the manufacturing to a contractor but ultimately decided to manufacture both the vehicle and batteries in-house. To make this happen, VW signed on Jones, Lang and Lasalle’s (JLL) Washington, D.C., office to conduct its site search, outlining plans for a combined battery and EV production facility on a single site (see attached “Original Connect Specs”).
Months later, in the summer of 2022, South Carolina entered the race to win Scout Motors. However, based on the original project requirements, all sites in South Carolina were cut. The company’s search continued, but yielded no suitable sites nationally. JLL’s seven-person team determined that the original scope of the project was not attainable, thus separating it into two projects. South Carolina – along with 74 other potential sites – was then reconsidered for the EV assembly aspect of the project, while battery production was sited in Ontario.
On December 9, 2022, JLL conducted a virtual site review of Richland County’s county-owned 1,349-acre Blythewood Industrial Park located roughly 20 minutes northeast of downtown Columbia and 80 minutes south of the Charlotte Douglas Airport along Interstate 77. This meeting launched the most intensive site selection process in VW’s history, according to VW executives, with repeated RFPs, questionnaires and visits executed over the course of less than 80 days.
Streamlining activities and creating a cohesive execution approach was critical for our local, state and corporate teams. To process all of the information, we created four side-by-side “war rooms”. Workdays typically began at 8 a.m. and continued late into the evening hours, often wrapping as late as 11 p.m., and included as many as 20 engineers and other professionals from VW’s Wolfsburg planning team divided into four groups:
- Site development (geotech, wetlands, mass grading, permitting)
- Logistics (supply chain, road, rail)
- Human Resources (training, technical colleges, universities, workforce)
- Legal (incentives and documenting discussions from other three rooms)
This process of meetings was repeated three times in less than two months. From this compressed schedule, the teams from VW, Scout, JLL, the South Carolina Department of Commerce and Richland County, along with our respective legal teams, collectively produced a 192-page project development agreement in exhaustive detail (see attached). Documents memorializing the incentives followed. The state of South Carolina’s incentive package is estimated at more than $1.3 billion, making it the largest incentive package in the state’s history.
As part of the development of the site, the county acquired an additional 855 acres, including a purchase of 465 acres from Google. With the purchase from Google, this project once again created history, as Google had never before sold land and had to develop a new process in order to sell the land to the county.
The nuts and bolts for the site’s development make it the most technically challenging greenfield project in the state’s history. Numerous utilities that bisect the site are to be relocated, including a 48-inch water line, a 16-inch wastewater line and a 230-kV transmission line; rail access will need to be extended approximately 1 mile over an interstate; and a new interstate interchange will be constructed, along with extensive road improvements that will be made surrounding the site.
Additionally, the site is the largest mass grading project currently occurring in the Southeast with more than 24 million cubic yards of dirt being moved. The accompanying wetlands permit is the largest stream credit mitigation in the state’s history.
At build-out, this site will employ an estimated 4,800 people in phase 1 and is anticipated to produce approximately 200,000 units annually. Employment and production are expected to double in phase 2, which is expected within the next two years, taking total employment to more than 9,000, including more than 1,000 managerial and professional staff on site, and production to 470,000 units.
To provide some perspective on the scale of facility and its capabilities:
- BMW’s facility in the Greenville-Spartanburg area of South Carolina is the company’s largest worldwide production site, producing approximately 430,000 units annually.
- Volvo’s first U.S. plant, located near Charleston, SC, has the capacity to produce approximately 150,000 vehicles annually.
- The Scout Motors site will comprise approximately 13 million square feet of buildings. BMW’s Upstate South Carolina site features about 8 million square feet of buildings and Volvo’s plant covers about 2.3 million square feet.
Impacts of Scout’s presence are already being felt in the community as suppliers and potential employees are lining up quickly. Scout is the hottest name in town and the state.
To help source employees, the state will construct a new 25,000 square-foot training facility on site, and workforce development groups are partnering with the county on the purchase and development of a large off-site training facility. The county has provided incentives to the company and dedicated land for an on-site daycare center. It will also fund upgrades to fire services to address potential battery fires.
With only 12.8 percent of the region’s workers currently in quality manufacturing jobs, this project will change lives for generations to come and the overall arc of growth in our community into the future. Scout’s new human resources director – who spent more than 20 years at BMW – has coined the phrase that Scout isn’t creating jobs, they are creating careers in manufacturing.
Richland County/Scout Motors FAQs
Why Richland County and why Blythewood?
Richland County and Blythewood have all the necessary ingredients for businesses and families to thrive. It is centrally located within South Carolina, near the capital city, and within a reasonable distance of several major automobile manufacturing facilities. Blythewood has the available prepared land with water and sewer connection, direct access to I-77, 7 miles from the Columbia airport, and only 120 miles to the Port of Charleston. Lastly, the available workforce in the surrounding area is highly qualified, so Scout will have a strong talent pool from which to recruit new employees.
Will this increase traffic and congestion in our community?
All parties are committed to building a world-class manufacturing facility that will have a limited effect on the traffic and congestion within the town of Blythewood and surrounding areas. The state of South Carolina, Richland County, and the company are all committed to ensuring that the positive economic growth that emerges from this project is managed sustainably, including by constructing and improving the infrastructure needed to avoid traffic challenges. Richland County is already in the process of widening Blythewood Road as part of the Penny Program. As part of this new development, state incentives are being provided to construct a new interstate interchange, construct a new road, widen long stretches of roads and make significant improvements to several intersections.
This project will not arrive overnight. Construction will take time, production is not slated to begin until 2026, and operations will continue to be ramped up in the ensuing years. This timeline will give us an opportunity to manage the growth sustainably and ensure its benefits are spread equitably throughout the community.
What is the potential economic impact of this project?
The economic impact of a project this size is incredible. Scout is investing $2 billion and up to 4,000 jobs will be created to supply this state-of-the-art facility. That translates to good-paying jobs for generations of Richland County residents. We also know that when large projects like these invest in communities, there are often hundreds of other ancillary jobs and investments made that will have a positive impact on the community. With this project, a large new taxpayer would be present in the county and that could help alleviate the need to raise taxes in the future given the impact this new development would have on tax revenue to the county.
An economic analysis conducted by University of South Carolina economist Joey Von Nessen estimates that by 2029, Scout will have a $4.2 billion annual economic impact on the state. This factors in indirect economic activity, including that spurred by other suppliers, wages paid and consumer spending at area businesses, as well as direct investment by the company.
Will this project bring additional subdivisions and developments around Blythewood?
Richland County is a thriving and growing county, including the town of Blythewood. We believe that it is possible to responsibly control development within the town and the county while also planning for major economic development projects that will provide long-lasting benefits to the community. With economic growth comes a likely rise in property values around the area, benefiting existing residents. A new flagship business like this also means increased exposure, foot traffic and customers for existing local businesses that will continue to make up the backbone of our area’s economy.
What will happen to my home value as a result of this project?
Although the future is uncertain and individual situations may be distinct, historical data from similar projects in South Carolina indicate that a manufacturing investment of this size can have a positive impact on the surrounding area. In Greer, home values in the vicinity experienced a notable increase following the investment of BMW, and Ladson saw a similar impact following the arrival of Mercedes. Given that the facility will be creating 4,000 jobs, many new employees may be interested in living near it if they are not already, which will drive up housing demand. Additionally, the increased public revenue as a result of this economic development project will help fund improvements to the town’s infrastructure, schools, and other amenities, which can in turn make it a more desirable place for many potential homebuyers.
Why is there a rail? And is the rail’s location on the site moveable?
Scout Motors required rail. Any location that was being considered for the partnership had to have access to a functioning rail system in order to meet the logistical needs of the company. Without this key element, we would not have been able to successfully bring Scout to South Carolina. Rail is also the most efficient method of materials transportation to and from the site, both from a logistical and environmental standpoint, and it will significantly reduce the need for trucks that would risk increasing traffic on public roads near the site.
Engineers conducted a thorough evaluation of the site and determined that the current plan is the only feasible location for the rail. Any deviation from the current plan would require relocating the planned interchange, which would not be permissible under Federal Highway Administration (FHWA) guidelines, or it would not be possible due to the rail’s restricted amount of geometry based on gradient and curve.
Will there be noise from the rail? If so, what measures will be taken to mitigate it?
The elevation of the plant is planned to be about 70 feet above the homes and there will be a berm along the top of that area as well. To further minimize potential noise impacts from the railway system, the rail design has been planned with the speed of operations at around 10 mph, and the curves of the design have been kept very minor to limit the amount of steel wheel to steel rail squeal during operation. Based on the current design, no at-grade crossings will exist in the plant, so there will be no need to operate the locomotive horn unless an emergency requires it.
Significant buffers will be established along the property lines. The facility and the rail will be situated at a distance of at least 600 feet from the property lines. There is also a 300-foot buffer planned along Blythewood Road.
We commissioned Terracon consultants to conduct a sound study for the Scout Motors site and the study is now complete. The report can be viewed here: Project Connect Rail Spur: Noise Analysis Report
The study utilized sound modeling to evaluate the operational noise for comparison with the measured ambient site conditions. The results showed that the project activities contributed sound levels ranging from 37 to 47 dBA, which were generally equal to or lower than the ambient conditions for the majority of the receptor locations. The results of the modeling indicate the rail operational sound emitted on the site diminishes with distance, topography and ground cover. Therefore, minimal offsite noise is expected to impact sensitive receptor locations, and the project is not anticipated to significantly affect community sound levels based on the impact thresholds defined by the Federal Railroad Administration (FRA) methodology.
What is the environmental impact of the rail? Is there an alternative to rail?
The environmental impacts of rail transportation can vary depending on various factors such as the type of locomotives used, the frequency of trains, and the speed of trains. Rail transportation is widely considered to be a relatively environmentally friendly mode of transportation, especially when compared to other forms of transportation, such as road or air transportation.
According to the United States Environmental Protection Agency (EPA), freight rail transportation is up to four times more fuel-efficient than truck transportation and reduces Greenhouse Gases by an estimated 75% (AAR). Rail moves 40% of freight in the U.S. but only accounts for 0.6% of greenhouse gas emissions and 8% of all freight emissions (EPA, 2018).
What will happen to wildlife on the Scout development site?
Richland County conducted an endangered species study as part of our due diligence in purchasing the property. No endangered species were identified.
Will there be any water runoff and how will that affect the environment?
As is customary with most commercial industrial developments, some stormwater runoff is expected. To mitigate potential adverse impacts on downstream properties, roads, or residents, Scout plans to construct detention ponds that will adhere to all state and county regulations, designed to meet or exceed the required standards. The stormwater analysis will be carried out and permitted through the state to ensure that the design meets all necessary requirements.
Scout has committed to being an environmentally responsible neighbor, and the company is required to abide by all local, state and federal requirements for any stormwater runoff. All process wastewater will be treated and ultimately go the City of Columbia’s system, so there is no potential for contamination.
Are lithium batteries safe?
Lithium batteries are safe and reliable when used and handled properly, and incidents involving them are rare and often due to misuse. Ongoing efforts to improve the safety of lithium batteries, such as thorough research on materials and manufacturing, battery management systems, and regulations and standards, are helping to mitigate risks.
While we do not expect fires on site, we are still taking precautions to ensure they remain contained in the unlikely event of an incident. Scout’s facilities will have a fire station on site, and Richland County will also be making upgrades to the Blythewood fire station as part of our incentives package. Scout and Richland County are both fully committed to ensuring this project is managed with consistently high safety standards.
A recent study from AutoInsuranceEZ found that electric vehicles are less likely to cause a fire than either gas-powered or hybrid-powered vehicles. Hybrid-powered cars are involved in about 3,475 fires per every 100,000 sold. Gasoline-powered cars, about 1,530. Electric vehicles (EVs) saw just 25 fires per 100,000 sold.
Will this project have an impact on protected wetlands? What is being done to address that?
In early January, the U.S. Army Corps of Engineers issued a wetlands permit to the state and Richland County, which, in conjunction with related permits and approvals from the South Carolina Department of Health and Environmental Control (SCDHEC), enabled construction to continue to move forward on the Scout Motors site. These permits and approvals are the result of significant and positive collaboration among Scout Motors and federal, state and county authorities, and came after an extensive review process.
As part of this process, construction engineers sought to minimize impacts to wetlands on the site where possible. While some impacts to wetlands on the site were unavoidable, state and county officials prepared a massive mitigation package by purchasing and promising to protect thousands of acres of wetlands and many miles of streams in the Midlands, far exceeding the federal requirements. This mitigation package, which includes the entire 4,878 acres of the Congaree River Tract and 143 acres of the Shelton Island Tract, was crafted in consultation with partners in relevant agencies, conservation experts and the environmental community to ensure maximum benefit, and it has the potential to offer substantial new public access to critical natural resources.
Why are trees being cleared around the boundary of the site? Will they be replanted?
Some trees needed to be temporarily removed in order to put in better stormwater controls through grading, but those trees will be replanted in accordance with a full updated tree mitigation plan that will be resubmitted to the Town of Blythewood. We recognize the importance of maintaining a tree buffer between the site and surrounding roads, and that buffer will be installed by the time the project is complete.
Bottom line:
Given its role on the frontlines of the transition to clean energy, Scout Motors is a very environmentally-conscious company. They plan to build a world-class, industry-leading facility that residents of Blythewood can be proud of, and they will work to minimize any impact on the environment surrounding the facility. They are committed to being a respectful neighbor and a collaborative partner in the local community.
Sources:
Executive Summary: National Blueprint for Lithium Batteries 2021-2030
Due Diligence Studies
Richland County has conducted or commissioned numerous due diligence studies of the planned Scout Motors site, including economic, noise, and environmental studies. These studies help us to ensure that the development of the Scout Motors facility is both sustainable and beneficial for the community. We invite you to view these studies and learn more about the various impacts Scout Motors will have on Richland County and Blythewood.
Connect Reports
Blythewood Industrial LSI Report – Download
Beasley Tract Cultural Resource Report – Download
Blythewood Ind Site Ph II Archaeological Report – Download
Blythewood Ind. Sites (North) – CRIS Report – Download
Blythewood Ind. Sites (North)- Prelim. Geotech. Report – Download
Blythewood Ind. Sites (South) – CRIS Report – Revised – Download
Blythewood Ind. Sites (South) – Prelim. Geotech. Report – Download
Final Phase I ESA-Blythewood Industral Site (3-13-23) – Download
JN237170 Project Connect Sound Studyv5_16_2v2 – Download
Phase I ESA-Arum Property (3-2-23) – Download
Project Arum Cultural Resources Reconnaissance Report – Download
S&ME 22610625 Project Connect_Amended Preliminary Geotechnical Report – Download
S&ME 22610625A_Project Connect-Arum Tract_Preliminary Geo Report – Download
