Volkswagen will spend $800 million to expand a U.S. factory that will produce the automaker’s next generation of electric vehicles.
The factory in Chattanooga, Tenn. will be the company’s North American base for manufacturing electric vehicles, VW CEO Dr. Herbert Diess said during a presentation at the Detroit Auto Show on Monday. The expansion is expected to create 1,000 jobs at the plant.
VW’s Chattanooga expansion is just a piece of the automaker’s broader plan to move away from diesel in the wake of the emissions cheating scandal that erupted in 2015. Globally, VW Group plans to commit almost $50 billion through 2023 toward the development and production of electric vehicles and digital services. The Volkswagen brand (so not including its Audi or Porsche brands) alone has forecasted selling 150,000 EVs by 2020 worldwide, increasing that number to 1 million by 2025.
The company is also building a European facility in Zwickau, Germany set to begin EV production in 2019 and adding EV-production at facilities in Anting and Foshan, in China, in 2020, and in the German cities of Emden and Hanover by 2022.
The Tennessee factory (along with the other new facilities) will produce EVs using Volkswagen’s modular electric toolkit chassis, or MEB, that was introduced by the company in 2016. The MEB is a flexible modular system—really a matrix of common parts—for producing electric vehicles that VW says it make it more efficient and cost effective.
Electric vehicle production at the Tennessee site will begin in 2022. However, Volkswagen of America says it will offer the first EV based on the MEB platform to customers in 2020.
This EV will be a series-production version of the ID. CROZZ SUV concept that was 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 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, is slated to begin production in Chattanooga later this year.
“Volkswagen is continuing to invest in the US to broaden its manufacturing and R&D footprint,” Diess said. “Projects like the electric car production announced today and changes in our sourcing decisions are in line with the current direction of trade policy including the USMCA.”