German auto giant Volkswagen announced at the 2019 Detroit Auto Show that it will invest $800 million in its Chattanooga, TN plant to build an all-new electric vehicle (EV) for the U.S. market. The company claims this investment will add 1,000 jobs at the plant by the time production begins in 2022.
The Chattanooga plant already produces the Passat sedan and Atlas SUV, employing approximately 3,500 people in a 3.5-million-square-foot facility. Along with Zwickau in Germany, the Tennessee plant will handle EV assembly using the company’s modular MEB vehicle platform, which will underpin all future Volkswagen EVs for the next product generation and beyond.
Executives from VW also held a briefing with Ford on Tuesday, providing updates on a new global alliance between the two companies for the development and manufacturing of electric vehicles and the expansion of EV charging infrastructure, as well as autonomous vehicles and other products like midsize pickup trucks.
VW Hopes to Stifle Tariff Talk
According to a press release from the company, VW will offer its first MEB-based EV to customers in the U.S. in 2020, which will be a production-ready version of the I.D. Crozz SUV concept shown in Detroit one year ago. It will have the wheelbase and footprint of a compact SUV, likely similar in size to the Tiguan, but VW claims the interior will provide midsize-level space thanks to a battery pack that’s flat along the vehicle floor.
This investment in an American plant comes after U.S. President Donald Trump met with executives from VW’s German rivals BMW and Daimler at the White House in December to discuss a threatened tariff levied on European cars. “We hope that with the investment in Chattanooga we could make a contribution, step forward, to avoid tariffs between Europe and the U.S.,” Volkswagen CEO Herbert Diess said to Reuters in Detroit.
The production version of the I.D. Crozz concept will be the first fruit of Volkswagen’s $50 billion global investment worldwide through 2023 to develop and produce electric vehicles and additional “digital services.” VW aims to sell 150,000 EVs by 2020 worldwide, with that number ballooning to 1 million by 2025.
As the world’s second-largest new-vehicle market, North America plays a massive role in that plan.