Volkswagen has been talking up plans to shake up the global electric vehicle market for a while, and it’s now starting to make good on that ambition with an $800 million (700 million euro) project to build battery-powered crossovers in Tennessee.
The German auto giant said at the North American International Auto Show in Detroit on Monday that it will build a new assembly line at its Chattanooga plant to build ID. Crozz SUVs starting in 2022, using its “MEB” modular electric vehicle system. The project will create up to 1,000 new jobs at the plant, in addition to new jobs at suppliers, Volkswagen said.
“The U.S. is one of the most important locations for us and producing electric cars in Chattanooga is a key part of our growth strategy in North America,” CEO Herbert Diess said in a statement. “Together with our ongoing investments and this increase in local production, we are strengthening the foundation for sustainable growth of the Volkswagen brand in the U.S.”
The company has worked to overhaul its U.S. image after a costly diesel emissions scandal and management turnover, deploying billions of dollars to accelerate its electric vehicle offerings and sell 1 million of them annually by 2025. Its Tennessee investment also means that state will be a battery-vehicle powerhouse, as Nissan already builds Leaf compacts there at its sprawling Smyrna plant.
“The shift toward electric vehicles is a trend that can be seen worldwide, and Volkswagen’s decision to locate its first North American EV manufacturing facility in Chattanooga underscores Tennessee’s manufacturing strength and highly-skilled workforce,” Governor Bill Haslam said in a statement. “As one of Hamilton County’s top employers, these additional 1,000 jobs will have a lasting impact on the region.”
In total, Volkswagen aims to set up eight MEB plants in the coming years in Europe and China as well as North America. In addition to building the ID. CROZZ in Chattanooga, Volkswagen said it plans to sell the ID. BUZZ minivan in North America, the 21st-century version of its of VW bus.
The carmaker starts making ID. cars at its Zwickau, Germany, plant late this year. It’s also setting up MEB lines at German facilities in Emden, Hanover and Dresden facilities and Mlada Boleslav in the Czech Republic. Electric products for China will come from Anting and Foshan plants, there Volkswagen said.
Total investment in electric vehicle technology is to reach 9 billion euros by 2023, the company said.