VW sold out of ID.4 SUV before assembly starts in Chattanooga

Staff photo by Mike Pare / A Volkswagen ID.4 SUV sits outside the company's Chattanooga production plant with part of the arched employee walkway in the background. The SUV is to be built in Chattanooga in 2022.

Volkswagen Chattanooga won't build its first electric SUVs until July, but the automaker already has sold out of the vehicles it will make this year because of demand and supply issues, the company said.

"All the ID.4 basically this year is sold out," said Burkhard Ulrich, Volkswagen Chattanooga's president of human resources, at a news conference on Wednesday.

Ulrich said the fact that the ID.4 SUV is sold out is "very encouraging."

"It's good for our team members," he said. "They know they'll be working on a car that has such a strong customer demand."

Volkswagen's entire group, which also includes Audi and Porsche, has sold out of electric vehicles in the United States and Europe this year via pre-orders, according to the automaker.

Group Chief Executive Herbert Diess told the Financial Times at its automotive conference this month that VW is "really sold out for electric cars because demand is higher than expected."

Currently, the ID.4 is made in Europe and imported to the U.S.

Diess said supply chain disruptions that have hit the entire auto industry over the past year are starting to ease up. Diess said Volkswagen Group has a "very good semiconductor supply" from the third quarter.

Jesse Toprak, chief analyst at EV subscription company Autonomy, said Volkswagen is putting all of its cards on the table to reach its goal of a 10% market share in the U.S. and essentially doubling sales.

"VW sees the current hyper-growth of EV demand as the optimal pathway to reach this target," he said in an email.

Earlier this month, Volkswagen Group revealed plans to electrify the Scout brand with the aim to form an independent company to design, engineer and manufacture pickups and rugged SUVs for the American market.

The start of production is planned for 2026 in the U.S. at a location that wasn't named by VW.

Toprak said the initial success of other iconic off-roaders reborn as EVs, such as General Motors' Hummer EV, as well as newcomers like Rivian Automotive, encouraged VW to bring back Scout with the hopes of taking a piece of the exploding mid-range EV truck market.

"If the Scout design team gets this one right, I think VW will have an instant cult classic on their hands," he said.

Ulrich said there's a lot of production speculation about the Scout and the ID.Buzz, which is based on the iconic VW Microbus and will go on sale in the U.S. in 2024.

"No decision is made yet," he said. "We want to grow in the market. We want to be a very prominent and relevant player in the U.S. car market. I'm sure there will be more decisions to come in the future."

Last month, a report from a German magazine said Volkswagen is looking at building a second plant in the U.S., and it could sit next to its existing Chattanooga factory.

Manager Magazin, citing unnamed sources, said the production capacity in the U.S. could more than double to 600,000 vehicles annually.

Scott Keogh, Volkswagen Group of America's chief executive, said in March that he recently returned from the Chattanooga plant and a visit with Tennessee Gov. Bill Lee and Chattanooga Mayor Tim Kelly.

"We had good meetings with Lee, the team in Nashville and the mayor," he said in a virtual meeting with journalists. "It's a great plant and has a great future."

On Wednesday, Volkswagen Chattanooga unveiled a $3,000 bonus for all production and maintenance employees. 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.

The hiring surge is VW's biggest since it began production in Chattanooga in 2011.

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