HERNDON, Va. — Volkswagen Group of America Inc. plans to spend at least $7.1 billion in North America through 2027 to build up its local electric vehicle (EV) production capacity as well as bolster interim internal-combustion-engine-powered production as part of a push to regionalize its product decisions for the continent.
The company is planning to introduce by 2030 more than 25 battery-electric vehicles across the group's brands that sell in the U.S.: VW, Audi, Porsche, Bentley and Lamborghini.
More importantly, perhaps, it also plans to localize "all major design and engineering responsibilities" for development of EVs for North American consumers by 2030 — a move that could, in theory, allow VW to produce an electric midsize pickup for U.S. consumers, as well as other products.
The investment includes the construction of a battery plant as well as overhauls of its assembly plant in Puebla and an engine plant in Silao, Mexico.
"The Volkswagen Group has taken a leadership position in the American EV market," Volkswagen Group of America CEO Scott Keogh said. "To continue that conquest, we're investing over $20 million through June of this year into our dealers nationwide, transforming them into EV experience hubs serving communities across the country.
"The reason is simple," he continued. "We are transforming Volkswagen into an EV brand and I could not be more personally committed to this course."
Keogh said VW aims to push products that would push EVs to 55% of VW brand sales annually by 2030. Much of its future EV product lineup is already known:
- the ID4 compact crossover, which will begin local production at VW's Chattanooga, Tenn., assembly complex in the second half of 2022;
- the ID Buzz minivan, which will be imported from Europe beginning in 2024;
- a long-range sedan, called the ID Aero, in 2025; and
- electric versions of the Atlas and Atlas Cross Sport beginning in 2026.
VW will begin phasing out sales of internal combustion engine-powered vehicles in North America after the turn of the decade, Keogh said.
VW did not disclose whether its planned increase in North American battery production would be done in-house or in partnership with a supplier. Battery-maker SK Innovation built a plant in Georgia to supply VW's initial EV assembly operations in Chattanooga.
In comments last week, Volkswagen Group CEO Herbert Diess said the world's second-largest automaker planned an aggressive expansion of battery production to supply its EV ambitions.
Details of a full transition of its Mexico operations to EV production were also left undisclosed. The company said the overhauls of the group's two Mexican plants is "for the assembly of electric vehicles and components [such as e-motors] by the middle of the decade." VW assembles the VW Tiguan and Taos crossovers and the VW Jetta sedan at the Puebla plant.
Keogh also said that plant capacity for EV production in Chattanooga could ultimately reach 100,000 to 120,000 units annually after ID4 is fully ramped up. The plant is currently doing pilot builds, with a start-of-production planned for August/September.
That level of production "is exactly what the doctor ordered for that vehicle," to meet demand across North America, Keogh said. "I think we always had a bridge period to get the market ready, to get the dealers ready, to get Chattanooga up to speed. And frankly, the bridge period has been overwhelmed by demand for the ID4. The market is going through the roof."
