Volkswagen is planning to make electric vehicles in North America within five years, potentially meaning production of battery-powered cars in Chattanooga.
"Over the next few years, we will be making considerable investments in electric infrastructure," said Dr. Herbert Diess, the brand's worldwide chief, in a statement at the company's headquarters in Wolfsburg, Germany.
He said Volkswagen intends to evolve from a niche supplier of vehicles in North America into a "relevant and profitable volume producer."
"We will be significantly stepping up our activities in the USA," Diess said, citing large sport utility vehicles. "In those segments, we will be strongly expanding our range."
In a second stage, VW will then take its new electric cars to North America with local production to start from 2021.
In North America, VW's Chattanooga plant makes the Passat midsize sedan and, starting next month, the Atlas SUV.
VW also has a production plant in Mexico.