Volkswagen AG that it will spend $800 million to build two electric vehicles at its U.S. assembly plant in Chattanooga, Tennessee, as part of the company’s global effort to broaden the appeal of electric vehicles.
“The U.S. is the world’s second-largest market for electric vehicles after China,” said Hebert Diess, Volkswagen AG CEO, who said the first U.S.-built EV, a crossover style vehicle will be ready by 2022 with the second vehicle to follow shortly afterwards.
Diess hopes the company’s commitment building EVs in Chattanooga, and the large investment required to support it, will help keep at bay any threats of tariffs. “We are making a substantial investment in the U.S. with this announcement. We hope that counts for something,” Diess said.
Scott Keogh, the former Audi executive who took over Volkswagen of America in 2018, said before VW launches its new Chattanooga-made EV, the company also plans to import an electric vehicle from Europe. The Volkswagen Buzz EV, one of the key vehicles in VW’s electric vehicle strategy also will be imported from Germany, he said.
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Strengthening the company’s commitment to an electric mobility future, this expansion of Volkswagen’s U.S. footprint will include an investment of $800 million into the Chattanooga facility and could create 1,000 jobs at the plant, plus additional jobs at suppliers. EV production at the site will begin in 2022.
Chattanooga will be the first dedicated location in North America for production of a vehicle using Volkswagen’s modular electric toolkit chassis, or MEB. In addition to Chattanooga, Volkswagen is building the first dedicated EV production facility in Zwickau, Germany, starting MEB production by the end of 2019.
Volkswagen will also add EV-production at facilities in Anting and Foshan, in China, in 2020, and in the German cities of Emden and Hanover by 2022.
“The U.S. is one of the most important locations for us and producing electric cars in Chattanooga is a key part of our growth strategy in North America,” said Diess.
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“The management team, led by Scott Keogh, is committed to continuing to increase our market share in the coming years. Together with our ongoing investments and this increase in local production, we are strengthening the foundation for sustainable growth of the Volkswagen brand in the U.S.”
Volkswagen of America will offer the first EV based on the MEB platform to customers in 2020. This vehicle will be a series-production version of the ID Crozz SUV concept, first shown at the North American International Auto Show last year. This vehicle will have the interior space of a midsize SUV in the footprint of a compact SUV. Volkswagen of America will also offer a multi-purpose EV based off the ID Buzz concept.
Volkswagen currently builds the midsize Atlas SUV and the Passat sedan at the Chattanooga factory, which opened in 2011. A five-seat version of the Atlas, the Atlas Cross Sport, will begin production in Chattanooga later this year.
“We could not be prouder to build the future of mobility here in the U.S.,” said Scott Keogh, CEO and president of Volkswagen Group of America. “We’re known as ‘the people’s car’ for a reason, and our EVs will build on that tradition.”
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Globally, Volkswagen Group plans to commit almost $50 billion (44 billion euros) through 2023 toward the development and production of electric vehicles and digital services. The Volkswagen brand alone has forecasted selling 150,000 EVs by 2020 worldwide, increasing that number to 1 million by 2025.