The Liberal Gun Club Forum

Volkswagen will spend $800 million to expand a U.S. factory that will produce the automaker’s next generation of electric vehicles.

The factory in Chattanooga, Tenn. will be the company’s North American base for manufacturing electric vehicles, VW CEO Dr. Herbert Diess said during a presentation at the Detroit Auto Show on Monday. The expansion is expected to create 1,000 jobs at the plant.

VW’s Chattanooga expansion is just a piece of the automaker’s broader plan to move away from diesel in the wake of the emissions cheating scandal that erupted in 2015. Globally, VW Group plans to commit almost $50 billion through 2023 toward the development and production of electric vehicles and digital services. The Volkswagen brand (so not including its Audi or Porsche brands) alone has forecasted selling 150,000 EVs by 2020 worldwide, increasing that number to 1 million by 2025.

The company is also building a European facility in Zwickau, Germany, set to begin EV production in 2019 and adding EV-production at facilities in Anting and Foshan, in China, in 2020, and in the German cities of Emden and Hanover by 2022.

The Tennessee factory (along with the other new facilities) will produce EVs using Volkswagen’s modular electric toolkit chassis, or MEB, introduced by the company in 2016. The MEB is a flexible modular system — really a matrix of common parts — for producing electric vehicles that VW says make it more efficient and cost-effective.

Electric vehicle production at the Tennessee site will begin in 2022. However, Volkswagen of America says it will offer the first EV based on the MEB platform to customers in 2020.

This EV will be a series-production version of the I.D. CROZZ SUV concept that was first shown at the North American International Auto Show last year. This vehicle will have the interior space of a midsize SUV in the footprint of a compact SUV. Volkswagen of America will also offer a multi-purpose EV based off the I.D. BUZZ concept.

Volkswagen builds the midsize Atlas SUV and the Passat sedan at the Chattanooga factory, which opened in 2011. A five-seat version of the Atlas, the Atlas Cross Sport, is slated to begin production in Chattanooga later this year.

“Volkswagen is continuing to invest in the U.S. to broaden its manufacturing and R&D footprint,” Diess said. “Projects like the electric car production announced today and changes in our sourcing decisions are in line with the current direction of trade policy including the USMCA.”

Ford Motor Co. and Volkswagen AG plan to work together to develop and build commercial vans and mid-size pickups for sale in South America, Africa and Europe starting in 2022 as part of an effort to boost global profitability for two of the world's largest automakers.

The automakers would share investments in the vehicles' platforms, and they would be sold under either the Ford or VW badge depending on the region in which they are sold, Jim Farley, Ford president of global markets, said Tuesday.

The commercial vehicles are the formal agreement the automakers have come to following months of negotiations on global partnerships. Ford and VW are continuing to negotiate other collaborations, including those on electric vehicles, autonomous vehicles and other mobility efforts. The ongoing discussions make allies out of two of the world's largest automotive brands as Ford and other automakers restructure to better prepare themselves for an uncertain future.