Chattanooga panel to consider $50 million state grant for VW

A Chattanooga panel Monday will consider approval of a $50 million state grant to Volkswagen related to the automaker's recently completed $800 million expansion.

According to documents, the grant to be considered by the Chattanooga Industrial Development Board is to reimburse Volkswagen for eligible expenses concerning the expansion that will enable the company to start production this summer of a battery-powered SUV.

Sybil Topel, the Chattanooga Area Chamber of Commerce's vice president of marketing and communications, said in a text that the grant is part of the incentives package that was earlier negotiated with VW.

Documents show the Tennessee Building Commission approved the capital reimbursement grant contract in July 2021.

(READ MORE: VW Chattanooga officials mull battery options as electric vehicle assembly to start)

The commission said in a 2021 memorandum that VW must show evidence for goods, materials, equipment and services procured through an open and competitive process. Also, the Office of the State Architect had to review and approve construction documents for compliance of the grant terms for each bid package associated with the work.

In January 2019, Volkswagen unveiled plans to invest $800 million and hire 1,000 more workers in Chattanooga to build EVs.

Herbert Diess, Volkswagen's chief executive, said at the 2019 North American International Auto Show in Detroit at a news conference that the automaker's first EV manufacturing facility in North America would go in Chattanooga.

Diess said then the United States is the second-largest market after China for electric vehicles, and the new production and technology is expected to lead to more growth in the Chattanooga automotive supplier base.

"Volkswagen is 100% committed to the United States," he said.

The Chattanooga plant, readying to build its first ID.4 electric SUV, earlier this year began offering a $3,000 bonus for all existing production and maintenance employees amid the tight job market.

Also, the automaker is offering a $3,000 signing bonus to new production workers hired through Oct. 31 as the company aims to bring on about 1,000 more employees before year's end.

VW plans to add a third shift to its Chattanooga operations in October to meet customer demand for the Volkswagen Atlas and Atlas Cross Sport SUVs, internal combustion engine products the plant is building, and the ID.4.

Contact Mike Pare at or 423-757-6318. Follow him on Twitter @MikePareTFP.