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Volkswagen Chooses Chattanooga For EV Manufacturing, Looks To Ford For Light- & Medium-Duty Trucks

Volkswagen has settled on Chattanooga, Tennessee, for the location of its new US EV factory. It also announced at NAIAS a new partnership with Ford to build medium-size pickup trucks and commercial vans. The two companies will also work on autonomous technology together.

Last September, Volkswagen said it was looking for a location in the US to build electric cars. It opened an assembly plant in Chattanooga, Tennessee, in 2011, but the company said that didn’t mean that’s were its new EV factory would be located. But yesterday, the company announced it will invest $800 million to add an EV assembly line to the Tennessee plant.

Volkswagen Tennessee

“The US is one of the most important locations for us and producing electric cars in Chattanooga is a key part of our growth strategy in North America,” said Dr. Herbert Diess, CEO of Volkswagen, at the Detroit auto show. “The management team, led by Scott Keogh, is committed to continuing to increase our market share in the coming years. Together with our ongoing investments and this increase in local production, we are strengthening the foundation for sustainable growth of the Volkswagen brand in the US.”

The EV factory will employ 1,000 new workers and will lead to many more jobs in the area for suppliers. We reported last week that SK Innovation will spend $5 billion on a battery factory outside Atlanta, Georgia. It expects that facility to be in full operation by 2022. Coincidentally (or not) the Volkswagen EV production line is expected to be cranking out cars by 2022. Google says it is a 118 mile straight shot up Interstate 75 from Atlanta to Chattanooga. Hmm.

The first electric cars from Volkswagen’s ID division will start rolling off the assembly line in Zwickau, Germany, in early 2020, if everything goes as planned. The first EV headed to America will be the ID Crozz, a crossover utility vehicle, according to TechCrunch. Presumably, those cars will be built in America once the new plant gets up and running.

Volkswagen & Ford Announce New Partnership

It is no secret that Ford and Volkswagen have been discussing a partnership since the middle of last year. On Tuesday, they made it official at the Detroit auto show. The new collaboration will begin by Ford teaching Volkswagen how to make pickup trucks. Since every 4th person in America is mesmerized by the prospect of driving the kids to school in a big, in-your-face pickem up, and since Volkswagen currently has nothing to offer pickup truck buyers, the deal makes a certain amount of sense from a pure marketing point of view, even if it is more than a little stupid for Volkswagen to be touting its big push to produce electric cars while choosing to build some of the thirstiest, least efficient vehicles in history,

For its part, Ford is hoping Volkswagen will teach it how to make electric cars in a hurry, since Ford is already a decade behind the competition. The two companies may collaborate on autonomous technology and new mobility services as well, according to The Verge.

”It’s my opinion that you can’t do this alone,” Ford CEO Jim Hackett said during a press call about the news. “We believe the fundamental shift is healthy, as it allows automakers to focus on their respective strengths and participate in developing these new mobility solutions, yet at the same time for our customers, offer many competitive options that they didn’t think they might get from automotive companies.”

The two companies will build a medium-size pickup truck together as early as 2022 and will also collaborate on building commercial vans, with Volkswagen responsible for a smaller city van and Ford responsible for a larger van with a 1 ton capacity.

“We love to work together with the Ford guys. They are really serious and professionals,” Volkswagen CEO Herbert Diess told the Detroit Free Press. “Volkswagen is a really big car company worldwide, a big car company, but we are not as big in small commercial vehicles.” He added that Ford is strong in trucks, “so we decided to join forces there. And we will become very, very competitive together in this segment — which consists of small commercial vans and small and midsize pickup trucks.”

Diess summed up the new partnership this way: “While both partners have a global footprint, Volkswagen is a market leader in Europe and China, and Ford is one of the major players in the United States. When it comes to future technology, we can build on comparable strong foundations.”

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