VW investing $800M to build electric cars in Tennessee

ID Crozz electric crossover

Volkswagen on Monday confirmed the location of its new North American electric-car plant: Chattanooga, Tennessee. Rather than building a new factory, VW will launch an $800 million expansion of its existing Chattanooga plant, which currently builds the Passat and Atlas, will allow VW to build future EVs on the company's MEB modular platform.

The first EV to be built in Chattanooga will be the ID Crozz electric crossover, which will roll off the line of the Chattanooga plant in 2022. VW also plans to sell the ID Buzz, a modern-day interpretation of the classic microbus, in North America. VW plans to sell 1 million electric cars globally by 2025, and plans to open eight MEB production locations globally by 2022.

"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," Herbert Diess, Volkswagen CEO, said in a statement.

The first VW electric car to launch on the MEB platform will be the ID hatchback, which is roughly Golf-sized. It'll start production in Germany by the end of this year, but will not be sold in the US.

Volkswagen expects to sell 150,000 electric vehicles by 2020 and 1 million by 2025. In addition to Chattanooga, the company is also building an electric vehicle facility in Zwickau, Germany, and is adding electric vehicle production to two plants in China and to two other facilities in Germany.

“Today’s announcement is a tremendous win for Tennessee as it shows that our state continues to be a prime location for foreign direct investment," said Department of Economic and Community Development Commissioner Bob Rolfe.