Volkswagen aims to start a third shift at its Chattanooga plant by year's end, a top official said Monday, also hinting at a chance for future assembly in the city of the ID.Buzz electric microbus.
Scott Keogh, president and chief executive of Volkswagen Group of America, added there are plans for other new electric vehicles and a possible battery plant in North America. He said whether future production involves Chattanooga is to be determined.
But Keogh said he recently returned from the Chattanooga plant and visiting with Tennessee Gov. Bill Lee and Mayor Tim Kelly.
"We had good meetings with Lee, the team in Nashville and the mayor," he said. "It's a great plant and has a great future."
Keogh said the new version of the iconic Microbus will be built in Hanover, Germany, yet he foresees demand outstripping that plant's ability to meet the need.
While importing the ID.Buzz to the U.S. from Germany is the plan in 2024, he said, VW "might need to adjust accordingly."
He said Chattanooga already has the company's electric-vehicle platform on which the ID.4 SUV is slated for production in the city late this summer.
"We have that platform in Chattanooga," Keogh said. "Let's see how it goes."
He said other electric SUVs are expected after 2026 in North America. Also, the company is studying whether to produce an electric truck for the U.S. market.
Keogh's remarks came during a virtual meeting with journalists as Volkswagen announced its plans to spend $7.1 billion in North America to boost its product lineup, carry out more research and development and bolster production in the region.
VW is targeting 55% of all its sales in the United States to be fully electric by 2030.
Keogh said hiring is ramping up in Chattanooga to meet assembly of the ID.4 and the existing Atlas and Atlas Cross Sport SUVs now built at the plant.
Having a third shift will help VW hit its goal of hiring 1,000 more workers at the factory when the German automaker announced in 2019 an $800 million expansion for electric vehicle production, Keogh said. The factory is expected to have about 4,500 employees.
Keogh said ID.4 production capacity in Chattanooga is from 100,000 to 120,000 units per year. That figure, coupled with existing demand for the Atlas and Atlas Cross Sport, would maximize the Chattanooga plant, the VW official said.
But he said the company is overwhelmed with demand for the ID.4.
"The market is going through the roof," Keogh said.
In terms of a battery plant, he said the company will need the units. Currently, VW plans to source batteries from a new $2.6 billion factory that South Korea's SK Innovation is building near Commerce, Georgia.
Keogh said whether a battery plant could go in Chattanooga is to be determined.
"We want the plant to be close to where we're building them," he said.
Meanwhile, battery materials maker Novonix is building out its new Chattanooga plant at the former Alstom site on downtown's Westside in a $160 million investment.
Chris Burns, Novonix's chief executive, said virtually last week during a conference that plans are by the end of 2023 to produce 10,000 tons of synthetic graphite. That product is used in making ultra-long-life, high-performance anode material for lithium-ion batteries for electric vehicles.
"We're installing furnaces now," he said.
By 2025, Novonix plans to produce 40,000 tons of the material at the Chattanooga plant, where it expects to employ about 300 people, Burns said.
This May in Chattanooga, VW's new Battery Engineering Lab will start operations, according to the automaker. A $22 million investment, the lab will enable the company to test and validate batteries for all Volkswagen electric models in the U.S.
Also, on the research side, the company will accumulate know-how and research capabilities in battery cell technology in Chattanooga and Belmont, California, according to VW.
Concerning gasoline-powered vehicles, Keogh said VW will start phasing those out of its American lineup with plans to exit at the beginning of next decade.
Volkswagen also plans to upgrade two existing factories in Mexico for assembly of electric vehicles and components such as e-motors, he said.
Beyond assembly, Volkswagen expects to localize in North America all major design and engineering responsibilities for the vehicle body and interior of products destined for domestic markets by 2030.