Scott Keogh, VW, in San Francisco, California, September 18, 2018.
David Paul Morris | Bloomberg | Getty Images
CHATTANOGA, Tenn. – Volkswagen is “actively” looking to establish new assembly and battery facilities in the US, Volkswagen of America CEO Scott Keogh told CNBC on Wednesday.
Keogh declined to discuss possible locations for such operations. The German automaker’s electrification efforts are currently based in Tennessee, including local production of the VW ID.4 crossover EV, set to begin later this year.
“We are actively in the process of looking at another production facility and also looking at a battery facility,” Keogh said in an interview.
A company spokesperson said Volkswagen is still discussing and evaluating its options, and no decision has been made.
Such facilities, whether new or expanded, would be a significant decision and mean potentially billions of dollars in new US investment for VW, which currently has North American assembly plants in Tennessee and Mexico.
Any investment would follow similar moves by other companies to increase EV production in the US – a key goal of the Biden administration.
The possibility of new VW electric vehicle features in the US was previously reported by European media.
Keogh’s comments followed the grand opening of the German automaker’s new $22 million electric vehicle battery lab, located near its only US assembly plant in Chattanooga. This is part of a $7.1 billion commitment to boost its EV efforts in North America.
The new 32,000-square-foot Battery Lab will test and optimize batteries for electric vehicles for the US market. It is one of four such features that VW has announced globally.
ID.4 Production Ramp
A VW EV ID.4 cross-over at the VW plant in Chattanooga, TN on June 8, 2022.
Michael Welland | CNBC
Keogh said Volkswagen expects a significant increase in its US availability and sales of electric vehicles during the second half of this year, as it prepares to increase US production of its ID4 crossover.
Volkswagen has been importing the ID.4 from Germany in limited quantities since last year, between 800 and 2,000 cars per month. Keogh said local production at its Chattanooga plant is expected to rapidly increase to about 7,000 ID.4 models by the end of this year.
“We don’t want to launch with 100 cars. We want to launch with a few thousand cars,” he said. “it is too big.”
Pre-production models of the vehicle to be used for testing, validation and other purposes are currently being assembled at the plant. Official production is expected to start early next month. Keogh said the vehicles are expected to flow to dealerships in early September with significant availability.
Such a production ramp-up would be much quicker than many of the new EVs coming to market, including start-ups such as rivian as well as other traditional vehicle manufacturers such as General Motors,
VW sold only 2,755 models of the ID.4 during the first quarter of this year. Last year it sold 16,742 vehicles.
Keogh said the Chattanooga plant is expected to eventually reach a production capacity of 10,000 ID.4 EVs per month when it is fully operational and is running with three shifts of workers – a first for the plant.
Keogh said current imports of about $41,000 EVs excluding any federal or state incentives are not enough to meet customer demand. He said the vehicles were “completely sold out.”
