Volkswagen Throws Its Hat into the Electric-Car Ring
Days after General Motors announced that it would halt production at four North American plants, Volkswagen announced plans to open a new one. The German automaker is scouting locations for a new production factory to build electric vehicles, which it plans to bring to market in 2020.
“We are 100% deep in the process of ‘We will need an electric car plant in North America,’ and we’re holding those conversations now,” Scott Keogh, CEO of Volkswagen of North America, told reporters at the Los Angeles Auto Show.
It’s part of a planned $50-billion investment over the next five years that Volkswagen intends to make in electric cars, autonomous vehicles and other technologies. The company is also exploring areas of cooperation with Ford Motor Company.
Keogh didn’t reveal details about the new model, other than saying it would be priced between $30,000 and $40,000, a price point that would enable it to compete with a lower-priced version of Tesla’s Model 3 that is due out next year. The 2020 introduction for the Volkswagen electric car, though, means that it will be initially be sourced outside the U.S.
Volkswagen’s existing U.S. plant in Chattanooga, TN, where the Passat and Atlas are built, could be one option because there’s enough room at that facility. However, Keogh said it wouldn’t necessarily be chosen.
Although Tesla has thus far captured the largest share of the U.S. market for electric vehicles, the field will be growing more crowded over the next couple of years. Keogh acknowledged that Volkswagen is arriving comparatively late to the party, but said it wasn’t too late to take advantage of a “massive opportunity” in the U.S.
“The market timing actually is quite perfect,” Keogh told reporters. “You need to have this intersection of, ‘Can you get costs down enough that you can produce a car at that price point, make enough money, have the technology capabilities that this is a car that we would want to put in the marketplace, and have market acceptance?’
“And when all these things intersect, that’s ideally when you want to throw the dart,” he added.
Coincidentally, Volkswagen’s announcement comes amid news that the field for the company’s electric vehicles will be a little less crowded than might otherwise be the case. As part of its downsizing of North American production, GM will discontinue the Chevrolet Volt next year.
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