UPDATE: Chattanooga to add 1,000 jobs, second Volkswagen facility with $800 million investment
DETROIT - As Volkswagen makes a big bet on electric vehicles worldwide, the automaker appears ready to amp up production plans for its Chattanooga plant.
Jessica Caldwell, an analyst for auto researcher Edmunds, said electric vehicles are where all the big players in the auto industry are heading.
"It's very important," she said. "When you look at the landscape in the future, there are a lot of vehicles that will be electrified in some form."
Today, at the North American International Auto Show here, the German carmaker is expected to showcase plans for future electric vehicle production in Chattanooga.
VW officials declined to comment ahead of a morning announcement that's to draw top officials.
However, company officials in America and Germany have for months talked about the possibility of making battery-powered vehicles in North America, including in Chattanooga, where VW already employs about 3,500 people making the Passat sedan and the Atlas SUV.
Last fall, Volkswagen officials in Chattanooga said that up to 1,000 more jobs could be added at the plant as the company planned to hire a third shift to bolster production. But it's unclear if those jobs are tied to today's announcement.
Late last year, at the Los Angeles Auto Show, Volkswagen Group of America CEO Scott Keogh said the automaker was scouting sites in North America for electric vehicle production and the Chattanooga plant was an option.
"We are 100 percent deep in the process of 'We will need an electric car plant in North America,' and we're holding those conversations now," he said.
Keogh said VW's Chattanooga plant has room for extra assembly at the factory that makes the Passat sedan, the seven-seat Atlas sport utility vehicle and, soon, a five-seat version of the SUV on which production is to begin this year.
Also, a possible Volkswagen-Ford Motor Co. collaboration could be revealed Tuesday. It, too, may involve electric vehicles. With the high expense of developing electric and self-driving vehicles, automakers are having to manage their costs, Reuters reported last week.
VW officials have talked about gaining access to Ford's Transit commercial van and the Ranger midsize pickup truck, as well as building their vehicles in Ford plants.
Tennessee Gov. Bill Haslam said in December that building electric vehicles in Chattanooga would be "the next logical step" for the German automaker.
"We're very hopeful," he said. "We continue to be in discussions."
Volkswagen Group CEO Herbert Diess said in Washington, D.C., after a White House meeting that the company was in advanced talks with Tennessee about a second plant.
But he added that there are other options. Diess said then that VW was talking with Ford about potentially making vehicles at the American automaker's plants as part of a wider agreement.
VW expects to spend $50 billion on developing electric cars, autonomous driving and new mobility services by 2023 worldwide.
Chattanooga Mayor Andy Berke, while not commenting on potential electric vehicle assembly, said there is physical room at VW's Enterprise South industrial park plant to grow the auto sector.
"When we have discussions of land at Enterprise South, we're conscious of future growth," he said. Enterprise South is the 6,000-acre former U.S. Army munitions factory that the city and Hamilton County bought, cleaned up and pitched to major companies.
Berke said there's enough room for VW to mirror its existing plant as well as for the automaker's suppliers to expand to the site, should companies make the investment.
"There's also room at Enterprise South for more suppliers and to continue economic development," he said.
Contact Mike Pare at email@example.com or 423-757-6318. Follow him on Twitter @MikePareTFP.