Last updated on April 22nd, 2020 at 11:31 am
The Volkswagen Group is hot on electrifying its fleet. Earlier in the year, the manufacturer showcased its new affordable all-electric hatchback, the ID. 3 and released the Porsche Taycan, a formidable sports car that took many by surprise for its incredible performance against the Tesla Model S. To compete with the latter company, Volkswagen needs to up its all-electric presence in the US. As such, on 14 November it announced the start of the construction of its electric vehicle facility in Chattanooga in the United States.
The new site will be VW's North American hub for EV manufacturing. The investment is forecasted to cost the automaker about $800 million, where it'll also create 1,000 new jobs in the area – that adds around 50% to its current workforce in the plant.
The factory will be predominately aimed at manufacturing new EVs – we're told that production will begin in 2022 with the VW ID. Crozz (or similar ID. SUV); it'll be the first vehicle out of the US-based factory. At the time of writing, VW builds a midsize Atlas SUV and the Passat sedan in Chattanooga. Having the ID. Crozz come out from the same factory makes sense – might we even see the VW ID. Buzz campervan produced in the same factory? There's a high chance given the vehicle's popularity over in the States.
However, EVs aren't the only thing Volkswagen wants to take to its US plant, as it wants to assemble EV battery packs too. Its electric vehicles will run on the firm's Modular Electric Drive Matrix (MEB) platform, and as such, will need battery packs to power them. Having them localised rather than shipping or transporting them for elsewhere will save the company a lot of money.
The expansion of the factory marks a 564,000-square-foot addition to the body shop; given the entire facility is currently around 1,900,000-square-feet in size, the EV addition isn't to be taken lightly. Scott Keogh, president and CEO of Volkswagen Group of America said: “This is a big, big moment for this company. Expanding local production sets the foundation for our sustainable growth in the U.S. Electric vehicles are the future of mobility and Volkswagen will build them for millions of people. ”
The rise in popularity in EVs has set off every car manufacturer around the world and competition in certain territories are instrumental to success. Tesla's soon-to-be-finished Gigafactory 3 is deemed as a strategic move to cater to the Chinese market. The US is a big market for these automakers too, and with homegrown companies like Tesla setting the benchmark for autonomous all-electric vehicles, most are playing catchup.
VW only just started the production for the ID. 3 hatchback earlier this month in Zwickau, Germany. The company wants to roll out assembly to its plants around the world: the next two to receive the ID. 3 will be in Anting and Foshan, in China, in 2020. According to VW, its MEB platform will be “produced at eight locations on three continents” by 2022.
Whilst VW might be the first large-sized automaker to fully embrace an all-electric future, we wonder what could have been possible had the manufacturer adopted electrification far earlier. In some ways, the later adoption of an all-electric powertrain played into Tesla's favour. Without building up steam and establishing itself as an innovator, companies like Tesla would have never existed. Take Chinese electric vehicle automaker, Nio for example – according to Fortune, it lost more than $5 billion and is now struggling to keep afloat. That could have been, and nearly was the case for Tesla.
Just to reemphasise: in 2018, the Volkswagen Group had 302,554 employees around the globe, a revenue of €235.849 billion (US $278 billion) and produced 11,018,000 vehicles, globally. By comparison, Tesla had around 45,000 employees, a mere revenue of US $21.461 billion and produced just 245,162 vehicles a year.
The EV landscape is constantly changing and we're excited to see what this could bring in the coming years. Let us know your thoughts in the comments section, below.