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Volkswagen Investing $7.1B in North American EV Development, Production

Volkswagen offered up a slice of it $100B global electrification investment plan, revealing today it’s spending $7.1 billion in the next five years in North America in hopes that 55% of all vehicles sold in the U.S. to be electric by 2030.

VW battery pack assembly at Chattanooga
Volkswagen is investing $7.1 billion during the next five years to facilitate EV development and production in North America.

The effort is designed to bolster its vehicle portfolio, regional research and development and manufacturing capabilities for internal combustion and electric vehicles, according to the company. The results, if achieved, will see more than half of all new vehicles sold in 2030 will be battery electrics.

“American ingenuity and manufacturing know-how are at the heart of our strategy for growth, and thousands of men and women are working hard every day throughout North America to bring the Volkswagen brand to life for consumers,” said Scott Keogh, president and CEO, Volkswagen Group of America Inc. 

“This profound commitment to our localized capabilities will transform Volkswagen into one of the leading EV brands known for its commitment to innovation, quality, and the communities we call home.”

Popularity will lead the charge

While the company already sells the ID.4 in the U.S., it’s looking to make a much bigger statement — and drum up more excitement — with the news that the all-electric ID.Buzz microbus, which made its debut earlier this month, is coming to the U.S. in 2024. 

VW ID.4 AWD Pro grey driving
Volkswagen is aiming for 55% of all new vehicle sales in the U.S. to be BEVs by 2030.

The company also plans to expand its EV builds in the U.S., starting with the previously mentioned ID.4, which begin being produced in Tennessee later this year. The company plans to introduce new all-electric SUVs in the U.S. in 2026. While it’s been speculated they’ll be built in the same plant as the ID.4, VW officials haven’t confirmed that.

In all, Volkswagen Group brands plan to introduce more than 25 new battery electric vehicles (BEVs) to American consumers through 2030, the company said in a statement.

Currently, the Chattanooga, Tennessee plant builds the company’s Atlas and Atlas Cross Sport sport-utilities. The company notes that more than 90% of VWs sold in North America are built in North America. That number will rise a bit with the addition of the ID.4 later this year.

The addition of the electric crossover to U.S. manufacturing is part of the plant to give regions greater control over the types of vehicles — and what goes in them — they build and sell. The MEB electric platform — and the future SSP iteration — allow for that type of regional customization, officials said.

VW Chattanooga ID.4 assembly
VW plans to begin building its ID.4 electric crossover at its Chattanooga, Tennessee plant later this year.

Development and supplier network

To build the ID.4 in the U.S., Volkswagen invested more than $2.7 billion in supplier partnerships in North American, including its battery partnership with SK Innovation. The Volkswagen Group plans to build up a battery cell production in the U.S. to meet the growing demand for batteries across its brands. This part of the playbook is increasingly familiar with General Motors, Ford and most recently, Mercedes-Benz doing something similar.

Beyond supply, Volkswagen is expanding its battery know-how in the United States. In May 2022, its new Battery Engineering Lab (BEL) in Chattanooga will start operations. As result of a $22 million investment, the BEL will enable the company to test and validate batteries for all Volkswagen electric models in the American marketplace, the company said.

On the research side, the Center of Excellence (CoE) NAR Battery with locations in Belmont, California, and Chattanooga, will accumulate know-how and research capabilities in battery cell technology. The CoE closely collaborates with technology partners Quantumscape — which is driving solid-state battery technology — and 24M, which is re-imagining the design of battery cells.


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