As it prepares to begin building electric-powered crossover sports utility vehicles (SUVs) at its Chattanooga assembly plant, automaker Volkswagen AG said Tuesday it is is investing 1 billion euros ($1.12 billion) to set up a battery production plant in Germany.
Herbert Diess, CEO of Volkswagen AG, said that the factory is part of the company's effort to electrify its vehicles. He said the new battery plant will be built in the northern city of Salzgitter, which has ready access to vast wind power plants in the region.
Volkswagen is trying to move on from the diesel emissions scandal, which has so far cost the company 30 billion euros.
The announcement comes after rival Daimler announced Monday that it aims to make all of its passenger cars carbon-neutral by 2039.
Emissions in Germany's transport sector have stagnated since 1990, putting a drag on the country's efforts to reduce greenhouse gas emissions.
Volkswagen, the world's biggest car maker, is moving toward more electric car production around the globe and says its last generation of combustion engines will be launched in 2026.
In January, VW announced plans to invest $800 million and hire another 1,000 workers at its North American vehicle assembly plant in Chattanooga to begin making electric vehicles in Chattanooga by 2022. Volkswagen also is adding EV production at facilities in Anting and Foshan in China in 2020 and in the German cities of Emden and Hanover by 2022.