NOVI, Michigan — The Iran war and its impact on oil prices could underscore the ever-important value of Americans' pocketbooks in their car-buying decisions, Scout Motors Inc. CEO said on Wednesday.

Scout is a Volkswagen AG-owned subsidiary based in Charlotte, North Carolina, that's revitalizing a historic brand name and developing off-road electric and extended-range electric vehicles.

If gas prices do increase as a result of the conflict — roughly 20% of the world's oil passes through the Strait of Hormuz south of Iran — Scout won't immediately benefit, since it's manufacturing prototypes this year for testing at its $2 billion South Carolina plant. CEO Scott Keogh said production models should be in consumers' hands by 2028 following reports launch had been delayed from late 2027 because of technical challenges.

"If oil goes to ... a crazy place, Americans will respond," he said before the Automotive Press Association at the company's innovation center in Novi, where about 400 of Scout's 1,300 employees are based. "How do they respond? Generally, they respond by looking for more efficiency, and they can get that efficiency in different ways from batteries to plug-ins to smaller output engines, or whatever it might be. Efficiency is always important, regardless of what is happening in the Strait of Hormuz."

Electric vehicles have faced adoption challenges in the United States because of their prices, an insufficient charging network and reliability concerns. Scout in 2022 originally expected to be all-electric brand but a few years later announced plans for gas engine-supported models. The extended-range electric vehicle operates fully off a battery, but has an engine onboard to operate as a generator to charge it. Scout has more than 160,000 reservations for its first model, and 87% are for the EREV version, Keogh said.

There are hurdles every day to get to launch, but nothing that can't be solved, Keogh said: "What we're doing is miraculous and cool. I don't see challenges. I see an automotive startup."

The brand is a bet by Volkswagen to improve U.S. market share by appealing to a growing demand for rugged vehicles. Despite being one of the world's largest automakers, VW ranked 11th in U.S. vehicle sales in 2025 ​behind EV maker Tesla Inc., according to research ​firm Motor Intelligence.

Scout is adopting a direct-to-consumer retail model. The decision prompted two VW dealers on Tuesday to sue and seek class-action status against the German automaker, claiming a breach of contract.

Keogh said when looking at what U.S. consumers want, the direct-to-consumer strategy “made the most sense, without a doubt." He also emphasized the value of the customer data and efficiency from that model.

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