Volkswagen to invest $800 million building electric vehicle in U.S.

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Volkswagen Group said on Monday it was investing 800 million U.S. dollars to build a new electric vehicle at its plant in Chattanooga, Tennessee, and scheduled a briefing with Ford Motor for Tuesday on their efforts to forge a global alliance.

The German automaker said in an announcement at the Detroit Auto Show that it was adding 1,000 jobs at the Chattanooga plant and that electric vehicle production there would begin in 2022.

Volkswagen Chief Executive Herbert Diess said the company was considering building luxury Audi vehicles in the United States but that no decisions had been made.

German automakers have been under pressure from U.S. President Donald Trump to increase their investments in the United States. Diess and counterparts from German automakers BMW and Daimler met with Trump at the White House in December to urge the administration not to go through with a threat to slap tariffs on European cars.

The Tennessee investment “is a signal to the government that we are really committed to the United States,” Diess told reporters at the auto show.

Diess and Ford executives ducked questions about how broad their alliance could be, beyond previously disclosed plans to collaborate on commercial vehicles and potentially midsize pickup trucks. Ford and Volkswagen have been discussing collaboration on electric and autonomous vehicles.

Both Ford and Volkswagen face mounting costs for developing electric and autonomous vehicles. Diess told reporters that Volkswagen could shoulder its ambitious 91-billion-U.S.-dollar electrification plan on its own but was open to partnerships to increase economies of scale.

Volkswagen is building the first dedicated electric vehicle production facility in Zwickau, Germany, starting electric toolkit chassis production by the end of 2019.

The company will add electric vehicle production at facilities in Anting and Foshan, in China, in 2020, and in the German cities of Emden and Hanover by 2022.

Volkswagen plans to commit almost 50 billion U.S. dollars (44 billion euros) through 2023 toward the development and production of electric vehicles and digital services. The Volkswagen brand plans to sell 150,000 electric vehicles by 2020 worldwide, increasing that number to 1 million by 2025.

As part of Volkswagen's more than 25-billion-U.S.-dollar diesel emissions cheating settlement, it agreed to introduce three additional battery electric vehicle models, including the currently available e-Golf or its successor or replacement models through 2019.

Source(s): Reuters