Volkswagen Group has announced a $7.1 billion investment plan to boost product lineup, R&D and manufacturing in North America.

As part of this strategy, Scott Keogh, President and CEO of Volkswagen Group of America, said the carmaker aims to have 55% of US sales fully electric by 2030. VW will do that by locally integrating its combustion-engine (ICE) and electric vehicle (EV) assembly, as well as American-focused engineering, battery know-how and software development. 

"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. 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."

Scott Keogh, President and CEO of Volkswagen Group of America

The transition to an all-electric lineup means VW will start to phase out gasoline-powered vehicles from its American lineup, aiming to exit from sales at the beginning of the next decade.

VW will advance its electric lineup instead, including the US-made ID.4 in 2022, the ID. Buzz electric microbus in 2024, and new electric SUVs from 2026. In total, Volkswagen Group brands plan to introduce more than 25 new battery electric vehicles (BEVs) to American consumers through 2030.

The German automaker will leverage all capabilities in the North American region, with an essential component being the preparation of its Chattanooga facilities for local EV production. 

Gallery: VW ID.4 and battery pack assembly at Volkswagen's facilities in Chattanooga, Tennessee

As previously announced, the ID.4 SUV will enter production in Tennessee in 2022, sourced mostly from regional suppliers. By mid-decade, VW also plans to upgrade its plants in Puebla and Silao, Mexico, for the assembly of electric vehicles and components (such as e-motors).

Beyond production, Volkswagen aims to localize all major design and engineering responsibilities for the body and interior of products destined for North American markets by 2030. It will do so by scaling VW Group's global vehicle platforms (MEB and future SSP).

VW Group plans US battery cell plant, US subsidiary of CARIAD software unit

VW Group is also announcing plans to build a battery cell production facility in the United States to meet the growing demand for batteries across its brands. The company is currently assessing governance and finance models, with a decision to be finalized this year.

In addition, VW is expanding its battery know-how in the US, opening a new Battery Engineering Lab (BEL) in Chattanooga in May 2022. The facility will enable the company to test and validate batteries for all Volkswagen electric models in the American marketplace.

VW Group is also investing in R&D through its NAR Center of Excellence (CoE) Battery Cells with locations in Belmont, CA, and Chattanooga. The CoE will allow the carmaker to accumulate know-how and research capabilities in battery cell technology. The center closely collaborates with technology partners Quantumscape (San Jose, CA) for solid-state battery technology and 24M (Cambridge, MA) to reimagine the design of battery cells. 

Finally, VW is committed to developing software and digital solutions for American consumers, developed directly in the United States. As part of that, Volkswagen Group's software entity CARIAD SE will open a North American subsidiary in 2022, with software units in Seattle, WA, and California’s Bay Area. The goal is to strengthen the company's digital footprint in America. 

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