Volkswagen electric vehicles production to start in Tennessee

Volkswagen electric vehicles production to start in Tennessee This plant will focus in the manufacturing of Volkswagen electric vehicles in North America.

Volkswagen on Monday said that it will invest $800 in its plant in Tennessee.

This plant will focus in the manufacturing of electric vehicles in North America.

Volkswagen also announced that it will expand its plant in Chattanooga with the introduction of 1,000 new jobs in the factory for the production of electric vehicles. The company will start this production from 2022.

The company disclosed this expansion in a release it issued at the North American International Auto Show in Detroit. The factory will produce vehicles using modular chassis which will help in building electric vehicles. In March, the company announced an investment of $340 million in Chattanooga plant to build the five-seat version of the Atlas, the Atlas Cross Sport. Currently that plant produces the midsize Atlas SUV and the Passat sedan.

Wolfsburg, the Germany-based Volkswagen said that it has planned to commit almost $50 billion in 2023 for the development and production of electric vehicles and digital services. An analyst at LMC Automotive, Jeff Schuster said that Volkswagen’s decision of producing electric vehicles majorly happened

due to the European regulations and the emissions scandal of VW. The company has paid more than more than $31 billion in fines and settlements in US diesel emissions scandal. Commenting on this Schuster said, "The scandal essentially accelerated that trend. The most obvious solution is electrification."

The US President Donald Trump has also been trying to persuade the German carmakers to open more factories in the US. The company’s plant in Chattanooga has been built in 1400 acres with around 3500 employees working there. Herbert Diess, CEO of Volkswagen AG, in a statement said that the plant in Chattanooga is a key part of the brand’s growth strategy in North America.

For this new plant Diess also said that, "It's not easy to attract further labor there the labor market is a constraint, still, we have invested a lot, we have a lot of governmental support there, a strong team there. It makes more sense to increase capacity in Chattanooga."

There is a growing need for European carmakers to sell more battery-powered cars to meet tougher European Union limits on carbon dioxide emissions. These emission limits will become effective from 2021. Automakers like VW, Daimler and BMW risk financial penalties if they can't meet requirements for lower average emissions.

Jeff Schuster also said that electric vehicles are becoming important globally.

He also said that among other European brands, BMW, Mercedes, Audi and Volkswagen are the leading brands that are producing the highest number of electric vehicles. Other than VW, General Motors and Nissan are the other two brands that have their manufacturing plants in the state. There are more than 900 auto suppliers that have their operating units in Tennesse. Diess also said at the Detroit auto show that the brand can expand more rapidly than building a new facility elsewhere, but he sees both "pros and cons" to the decision.