Volkswagen's Chattanooga plant seen as 'natural choice' for electric vehicles

Volkswagen's Chattanooga plant seen as 'natural choice' for electric vehicles

March 16th, 2018 by Mike Pare in Business Around the Region

Staff file photo by Erin O. Smith / A Volkswagen employee walks around the outside of a vehicle inspecting different parts at the automaker's Chattanooga assembly plant.

Photo by Erin O. Smith

Volkswagen is amping up its plans to assemble electric vehicles, pledging to have nine locations producing them by 2020, with the Chattanooga factory seen as a favorite in North America.

While there's no official announcement, "we have said that Chattanooga would be the natural choice," said Jeannine Ginivan, Volkswagen Group of America's senior manager of corporate and internal communications, on Thursday.

Fast fact

VW plans to build as many as 3 million electric vehicles a year by 2025.

The German car maker said at its annual meeting in Berlin this week it would build at least 16 new electric vehicle plants by 2025, nine of which will be in operation by 2020, in Europe, China and North America, according to MarketWatch.

One of the plants will be set up at VW's factory in Chattanooga, MarketWatch reported. It said five are planned for China and the remainder will be added to the three sites it already operates in Europe.

VW has said that an all-electric SUV concept called the I.D. Crozz is slated for sale in the United States in 2020. Late last year at the Los Angeles Auto Show, it unveiled the I.D. Crozz, which will share the company's modular electric platform that's to underpin all future VW-branded electric vehicles. Executive Editor Joe Wiesenfelder said Volkswagen is going "all in" when it comes to producing and selling electric vehicles.

He said that in the wake of VW's diesel scandal, the company has to turn away from those vehicles.

"Electric is the safer direction for them," Wiesenfelder said. "That's where other manufacturers are going as well. That takes a lot of the risk out for them."

The Chattanooga Area Chamber of Commerce had no comment on prospects of the VW plant gaining electric vehicle production.

The new electric car plants are expected to be built inside existing factories and will use standard underlying technology to create greater scale and cut costs, according to MarketWatch. It is the same strategy Volkswagen used to create savings in production of its conventional cars.

The Chattanooga plant last year started assembling the seven-seat Atlas SUV after a $900 million investment by VW. The plant has grown its workforce to about 3,450 making the Atlas and the Passat sedan.

However, VW is idling the Chattanooga facility for two weeks late this month and in early April. The plant will have nonproduction periods on March 26-29 and April 2-5, reacting to slowing sales of its Passat sedan and higher demand for the midsize Atlas, according to an official.

The first week, however, VW has said it plans to do preventative maintenance and retooling for potential new developments.

As part of VW's so-called SUV offensive, officials have talked about assembly of a possible new vehicle in Chattanooga based off the Atlas, such as a five-seat SUV.

Also, Volkswagen this week announced it has secured $25 billion in battery supplies to underpin its electric vehicle push, putting pressure on battery-powered car maker Tesla Inc.

Worldwide, VW's brands are planning to launch 50 new electric models and 30 new hybrids by 2025 and to create electric versions of its entire range of more than 300 models by 2030.

Contact Mike Pare at or 423-757-6318.