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Volkswagen Plans $7 Billion Investment To Build Electric Cars In North America

Vokswagen is ramping up its electric car plans for North America.

Volkswagen Group announced this week it will invest $7.1 billion to produce battery-electric cars in North America, and will offer 25 new EV models to customers in the US, Mexico, and Canada by 2030. Its goal is for 55% of its cars to run on electricity by the beginning of the next decade.

Note that the Volkswagen Group includes the Porsche and Audi brands. It’s quite possible that several of those new models will carry a variety of brand labels, but be quite similar under the skin. According to Autoblog, some of them may be built on the forthcoming SSP platform being developed as part of Volkwagen’s so-called Trinity project, which will begin with a new large sedan known for the time being as the Aero B, which bears more than a passing resemblance to the newly introduced Lucid Air.

Volkswagen currently has a US assembly plant in Chattanooga, Tennessee, another in Puebla, Mexico, and a components factory in Silao. The new investment will go to converting those factories to electric car production. The Tennessee facility will start building American-made ID.4 models later this year. A large electric SUV similar in size to the Volkswagen Atlas is planned for around 2026 and there are reports of midsize electric SUVs built on either the MEB or SSP platform in the works as well.

Volkswagen also plans to construct a battery factory in the US in an as yet unnamed location. It could be near Chattanooga or closer to Mexico. A decision is expected later this year.

“American ingenuity and manufacturing know-how are at the heart of our strategy for growth, and thousands of men and women are working hard every day throughout North America to bring the Volkswagen brand to life for consumers,” says Scott Keogh, head of Volkswagen Group of America. “This profound commitment to our localized capabilities will transform Volkswagen into one of the leading EV brands known for its commitment to innovation, quality, and the communities we call home.”

Phasing Out ICE & Hybrids

Scott Keough also said this week the company wants to phase out the production and sale of cars with internal combustion engines and be fully electric by early in the next decade. If it plans for 55% of its sales in North America to be battery-electrics by 2030, that means it expects the transition to EVs to be quite rapid after that date. Keough added that plug-in hybrids are not part of the company’s plans, but that mild hybrids may be used to help boost the efficiency of its remaining gasoline-powered cars until they are phased out, according to Autoblog.

Electric Cars For North America

Currently, 90% of vehicles sold by the Volkswagen brand to North America customers are assembled in North America, including the Atlas and Atlas Cross Sport SUVs in Chattanooga, and the Tiguan, Taos, and Jetta in Puebla, Mexico. Going forward, it will emphasize interior designs that cater to North American tastes.

It also is working to obtain more local suppliers to its supply chain, partly in response to the sudden realization that globalization only works if there are no wars started by lunatics to contend with. Production in Zwickau has been shut down for two weeks while the company races to find a new supplier for the wiring harnesses used to make its MEB-based cars that were sourced from suppliers in Ukraine.

A new Battery Engineering Lab, where batteries for electric cars will be tested and validated, is scheduled to begin operations in Chattanooga in May. On the research side, the Center of Excellence, with locations in Belmont, California, and Chattanooga, will work closely with Quantumscape and 24M to advance the development of new battery technologies that are expected to lead to lower cost batteries with longer range and increased fast charging capabilities.

Add it all up, and Volkswagen Group is making  a major commitment to bring electric cars to the North American market.

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