Volkswagen Could Expand US Plant in Chattanooga

The Wolfsburg group is planning a second plant at the Chattanooga site. The electric Bulli successor ID.Buzz could also be built there.

According to an insider, Volkswagen wants to expand its plant in the USA. A person familiar with the plans told the Reuters news agency on Thursday that there is sufficient space for a second plant at the Chattanooga, Tennessee site. The electric Bulli successor ID.Buzz and a battery-powered pick-up should roll off the assembly line there.

The “Manager Magazin” reported, citing unspecified parties involved, that the capacity in the USA could be expanded to up to 600,000 vehicles. The construction of a battery cell plant is also being considered, probably near the Chattanooga plant. Volkswagen did not comment on the information.

CEO Herbert Diess is planning the construction of a second plant, reports Manager Magazin, citing those involved in the plans. It could be built right next to the current Chattanooga factory. The capacity in the USA could thus be expanded to up to 600,000 vehicles per year. In addition, the construction of a battery cell plant is also being considered, probably near the Chattanooga plant.
At first, no one could be reached at Volkswagen for comment.

There is still no final decision on the project, the magazine reports. The core brand VW has not been particularly successful in the USA so far, with a market share of 2.5 percent last year. The automaker also wants to strengthen US business in order to reduce dependence on China.
VW shares temporarily rose by 1.77 percent to 148.08 euros via XETRA.

In recent weeks and months, there have been indications that Volkswagen intends to turn its attention back to the US market in order to reduce its dependency on China. Now it will probably soon be concrete: According to information from “Manager Magazin”, CEO Herbert Diess is planning a second US plant.

The plant could be built right next to the current factory in Chattanooga, as those involved are said to have confirmed to the magazine. Northeast of the current production hall there is another brownfield site of a similar size. With a second plant, US production capacity could increase to up to 600,000 vehicles.

The insiders state that Diess is “firmly determined” to strengthen the US business – especially with regard to the core brand Volkswagen passenger cars. A final decision has not yet been made. The report does not indicate when such a decision should be made.

VW also wants to build most of its North American portfolio there
The same applies to the construction of a battery plant, which is to be built “probably near the Chattanooga plant”. A possible capacity is not even mentioned here, or whether VW wants to increase battery production on its own or together with a cell manufacturer. For the US production of the ID.4 starting in autumn 2022 in the current Chattanooga plant, the Wolfsburg-based company is known to be purchasing the cells from SK Innovation.

The plans for a battery plant are not surprising: a few weeks ago, the group announced that it was aiming to set up battery cell production in the USA. A decision is expected to be made this year, and “governance and financial models” are currently being evaluated for the planned battery factory, which will not only produce for the VW brand. What is new, however, is that the cell factory is to be built near Chattanooga.

Basically, the step that VW will expand production capacities in North America was indicated. In March, VW North America boss Scott Keogh stated that by 2030, 90 percent of the VW portfolio for North America should also be built in North America. At that time, Keogh confirmed that by the middle of this decade, the plants in Mexico – the car plant in Puebla and the motor plant in Silao – will also be converted to produce electric cars or components such as electric motors.

A possible model that could be produced in Chattanooga in the expansion building already exists: As a source close to the matter told Reuters news agency, the ID. Buzz roll off the assembly line. In Wolfsburg, the MEB van with retro features is said to have great potential on the US market.

The ID Although Buzz will be launched in the USA, it will initially be imported from Germany like the ID.4 – just from Hanover and not from Zwickau. Reuters quotes an unnamed top executive as saying in March that the ID. Buzz for North America could later also be assembled in the US or Mexico. This has not yet been confirmed by VW.

In addition, Reuters, citing the insider, writes that VW could also build an electric pickup in Chattanooga in the future. No further details are given in the notification. Although VW only recently had a rendering of an ID. Buzz released with a pickup rear – but whether such a model will go into series production is an open question.

Only this week Lars Krause, Sales Director at VW Commercial Vehicles, confirmed that the next generation of the Amarok should also come as an electric version. However, the Amarok was developed on the basis of the Ford Ranger and is to be built by Ford in South Africa. In addition, pickups the size of a Ranger or Amarok are considered small in the USA.

The VW Group had already announced that it would invest several billion euros in North America in the coming years and launch 25 new electric models there by 2030 – these should then account for 55 percent of US sales.
manager-magazin.de, reuters.com

 

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The Wolfsburg group is planning a second plant at the Chattanooga site. The electric Bulli successor ID.Buzz could also be built there.

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