VW Will Build New North American Factory For Electric Cars

NOV 29 2018 BY STEVEN LOVEDAY 68

Volkswagen’s new CEO is actively searching for a location to build an electric car factory in North America.

It’s crazy to us at InsideEVs that Volkswagen is doing so much to promote and gear up for its electric car efforts. We’re impressed by the company’s massive charging network plans and its increasing announcements of a plethora of upcoming EVs. In addition, the automaker has discussed the potential for multiple battery factories and is looking for global locations to build EV factories. We can only hope that all these efforts will pay off. However, we struggle to cover VW’s press releases and social media shares since there is so much contradictory information and automaker does not yet have much to show for its efforts.

We are eager and supportive of VW coming forth with an onslaught of affordable and compelling EVs. Despite the whole “Dieselgate” conspiracy, we want and NEED this to happen as much as anyone, and these huge steps are exciting. Let’s hope together that Volkswagen is sincere and on point and can make its plans a reality.

VW Group of America’s new CEO Scott Keogh specifically said (via Reuters) that this new North American plant must be established before the automaker can officially reveal a new, undisclosed electric car that will be priced around $30-40k and will arrive in 2020. VW Group has already announced spending multiple billions on research, development, and deployment of EVs, on top of new efforts in partnership with Ford.

The automaker currently maintains a U.S. site in Chattanooga, Tennessee. As far as Keogh is concerned, there may be enough space at that plant to move forward. However, he says that it may not be the final answer. VW is looking at options beyond the already established facility. He makes it clear that, despite Tesla’s current success, there is huge opportunity in the U.S. According to the CEO, VW can still take hold off the ever-growing electric car market. Keogh concludes:

The market timing actually is quite perfect. 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.

All we can do is hope that VW’s plans play out. If all successfully materializes, it will wow the segment. Fortunately, our own long-time EV expert Tom Moloughney was able to speak with VW execs at the L.A. Auto Show and voice his/our concerns. Hopefully, some new information was gleaned via the interview. We plan to share his insights more in the coming days.

Source: Reuters

Categories: Volkswagen

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68 Comments on "VW Will Build New North American Factory For Electric Cars"

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rey

$30,000-$40,000? what happened to 1/2 the price of a Tesla ? I guess VW meant top line Mod3 not the Base mod 3.Oh well one can dream,I was looking forward to a sub $20,000 VW EV

Kenneth Bokor

Yes, just like Tesla did…start with a higher priced EV first to get some margins and EoS than can build more affordable. I truly believe their sub $25K BEV will come.

Sharpe

VW will do everything possible to delay their sub $25K BEV for as long as they can.

3laine

I think they’re talking about the first one to be built at that new plant. The way it’s written doesn’t preclude other VW EVs from being built elsewhere.

At least, that’s how I read it.

David H

They are probably talking about the ID cross, since the Neo won’t come to America. I think Tesla’s Model Y will be its competitor, not the 3.

Mark.ca

I don’t know about that….the Cross looked pretty big in person….i don’t think the Y will be that big.

antrik

Neither will be a direct competitor, since Tesla’s offerings are more premium — but yes, I think it should be more or less in the same size class as Model Y.

antrik

I should add that VW already said a while back that the US will get a modified (IIRC 7-seater?), locally made variant of the ID. CROZZ — so I’d say it’s all but certain that this is what they are talking about here.

(I believe they were talking about 2021 for the US variant before — but it would make sense that they are advancing the timeline, as they now plan to initially import them until local production is in place…)

Do Not Read Between The Lines

“Half the price of a Tesla” was said in Europe, where Tesla currently only sell the S and X.

Link

More specificially in Germany, as he was guest in a German talk show.

John

How much do you think a Tesla costs??

Pushmi-Pullyu

The average selling price of a Tesla car, before the Model 3, was around $95k-100k.

Half that price isn’t going to be all that difficult to manage if VW makes a smaller, compact or subcompact BEV in high volumes. What’s going to be hard is finding enough batteries for all those BEVs, especially if they are 200+ mile BEVs. VW is reportedly making deals with multiple battery makers because they can’t get enough from just one or two.

Sad to see that lots of people have bought into the wishful thinking that when a VW rep said “half the price of a Tesla” he meant half the price of a Model 3. That’s not at all what he said, and likely not what he meant.

antrik

VW wants contracts with multiple suppliers to improve supply chain security and pricing, not because a single supplier wouldn’t be willing to supply enough capacity if VW asked for it.

rey

We will have a VW as good as a Tesla at half the price.Promise secured?

F150 Brian

The part of the quote you are refering to was:
“We will come in 2020 with vehicles that can do anything like Tesla and are cheaper by half”
He never said it would be as good as Tesla.

Now, about ‘2020’ and ‘half the price’ in the same sentence…

Get Real

Um, the part “…can do anything like Tesla…” certainly implies that it would be as good as Tesla.

In any case, its all good as the more EVs the better for everyone.

I for one believe that VAG will be the first major Western legacy LICE maker to go big into EVs and once they or another does it will start a domino effect even bigger then what we have seen with production-constrained Tesla on the others laggards.

Andy

I guess it all depend on what you “good as”. Do they mean they want to build a “premium” 3 second car, or do they mean they want to build a mainstream 300 mile car? I’ve always assumed the latter personally, as they are VW, not Audi/BMW.

David H
I also don’t think they mean to beat Tesla on every possible metric (especially 0-60). Otherwise you could just claim “well, the center display is not as big” or it has no glass roof something. As you say, some 300 mile vehicle with the same practicality as the Model 3 (so a very basic car but practical and with some Level 2 functionality) for 27k€. As a side note: Diess, who made the claim, is head of VW group, not VW brand. So he might have also meant a premium car. Though, again, since two cars can never be compared directly, there will be a difference in the offering. Slower 0-60 but on the other hand other comfort things (like ventilated seats or whatever). Björn Nyland has posted a video of the e-tron Quattro, which (in contrast to the Model X) seems to offer cooled seats, ionized air, perfume dispenser, 4-zone climate, head-up-display, massage funcion, is probably more rugged and has better noise dampening. But it is slower than the X, has no auto-presenting door, less room and so on. Both cars have their right to exist and I hope that the debate will get away from “Z is dead,… Read more »
antrik

Well, if by “anything” he actually meant just an arbitrary subset, he certainly should have chosen his words more carefully…

ffbj

Well, maybe VW should contact GM, they might have some empty factories available.
Why build a new one, when you could probably refurbish an old one, like Lordstown, for a lot less.
I would contact the state of MI. and see if they would declare Force Majeure if GM does not want to sell. Auto companies need to understand that they can’t go into a place teardown thousands of houses, build a factory, pollute the land, and then 20 years later pull up stakes and leave an empty eyesore, a white elephant, that destroys the value of all properties nearby.

By the by. has not much shown much (too much)? edit

offib

And if Ford gets involved with them that would make such a move that more potent.

MoMac
“Well, maybe VW should contact GM, they might have some empty factories available. Why build a new one, when you could probably refurbish an old one, like Lordstown, for a lot less.” The UAW is very strong in Michigan and Ohio. VW would like to avoid a unionized workforce in the USA. I think VW’s old Westmoreland factory in Pennsylvania is available again (or soon will be) for that matter. Sony used it to manufacture TVs after VW sold it, then Aquion Energy took it over, but they went bankrupt. Aquion’s IP was purchased, but the plan is/was to move manufacturing to China. So Westmoreland is either available or soon will be. Probably the Oshawa Car Assembly in Canada would stay union as well. And the Oshawa plant may not be suitable for a different company to set up operations there. It was built in 1907; so how many more years does it have left? It is one thing to keep operations going with the equipment and tooling already in place; and another thing for a different company to take over and set it up the way they want it, then potentially have to move after only 10 years or… Read more »
ffbj

Yes, there are certainly flies in the ointment. I considered the question around the UAW to be important as you point out. VW current facilities, in the U.S. are mostly in so called Right to Work States.

MoMac

Yes, I don’t think they would even consider buying back their old Westmoreland factory in Pennsylvania — which is very likely soon available (or already is) — because Penn is not a right-to-work state.

Murrysville EV

I believe the Westmoreland plant has been subdivided for multiple small businesses. It’s not available for producing cars.

ModernMarvelFan

Maybe VW doesn’t want to deal with UAW of the rust belts?

Kenneth Bokor

Agree 100% Steven. I too am very hopeful that VW can take the leadership role they are touting, including getting a quality BEV to more of the mass market (sub $25K). Lot of noice and party favours, but nothing really tangible yet. I to am excited and welcome what VW wants to do and hope they can.

Oh and hey VW, we have a very nice Oshawa ex-GM Plant here in Ontario that I bet you could get for a song with a very dedicated and experienced workforce as well! #CanadianJobs

Vexar

I sense that VW is more likely to buy the GM plants than Tesla. They would probably get a better price for the real estate out of GM. Of course, the whole “we need a plant before we can reveal a yet-unannounced vehicle” line cracked me up like a windshield being hit by a bowling ball. I mean, you gotta hand it to VW, all their press releases have a legalese catch to them. There’s always a slight condition buried somewhere. Like Easter falling on a Saturday or (US) Thanksgiving actually ending up on a Friday for once, I fear VW will not see the light of day with these promises + conditions. Fool me once? They’ll love you. Fool me twice? Come on, fool me again!

John Doe

EVs are heavy, and need major changes to an exciting factory. I was studying Industry 4.0 earlier this year, and a factory design strategist? Or what ever it is called in english. . A factory designer from VW said all their new factories would be designed for Industry 4.0 They had tested sub systems, and had thousands of hours in computer calculations to simulate the system.
They could buy a shell of a factory to totally redesign it – but will probably be cheaper to design and build a new one.
A new factory is so much more advanced, and will probably have a more green design.

antrik

Why would VW get a better price than Tesla?

G2

If they do come to Ontario (and I hope they do) they shouldn’t expect any cash from the current govt since they proved difficult enough that BYD decided to cancel their plans in Ontario.

G2

I would love VW to come to Ontario, but if they do, they shouldn’t expect any money from the current provincial govt since even BYD felt they couldn’t do business with them.

antrik

Does VW even sell sub $25,000 combustion cars in the US?…

G2

Hey; was it “50” or “15” that was misspoke by the VW Chairman?

ffbj

Ha, ha. He meant 15 and said 50 instead, plus they also sound similar in German.
I guess something got lost in the translation, like honesty.

Pushmi-Pullyu

That seems rather unfair. People do get mis-quoted from time to time. It was a verbal statement, not a written one.

The Volkswagen Group produced around 10.9 million vehicles in 2017. What logical reason would there be for believing a VW rep would claim his company will make 50 million EVs over the next few years? It’s patent nonsense. They can’t possibly switch from nearly all gasmobiles to nearly all plug-in EVs in such a short time. Even if they had the money and other resources for that, they couldn’t possibly get enough battery cells… and VW is quite aware of the shortage.

I, for one, have no problem believing he actually said “15 million” but the reporter(s) mis-heard him.

antrik

IIRC in the correction they actually said he misspoke?…

antrik

They sound even more similar in English… Which is relevant, since that interview was in English.

Link

I love all the drama about the 50 vs 15 debate, completely ignoring that even 15 millions is still a gigantic number that would dwarf every other competitor in the EV space, including Tesla.

G2

Just looking for accuracy in the reporting, and there is still a huuuuge difference between 50 and 15 that most people can recognize and appreciate.

Vexar

You mean billions. That’s more than enough money to build the SpaceX BFR program.

antrik

How do you know that Tesla won’t have build 15 million EVs by 2026? Certainly ambitious, but quite plausible as far as I can tell. And even if Tesla for some reason considerably slows down growth and only sells say half of that by 2026, that still wouldn’t exactly make VW “dwarf” them…

Kosh

So glad that Trump was able to make this happen!………………

John Doe

Don’t think he had anything to do about it.

Factory worker wages in the south are even lower then the average US factory wage of $11.32 an hour.
They can find effective skilled workers with experience in production.

It is a competetive place to do business for them. Unless VW have to pay extra toll/taxes to export the vehicles to other markets.
Then it will be for local markets only.

Pushmi-Pullyu

Just goes to show that no matter how obvious sarcasm is, someone is likely to miss it unless you append a smiley or a “/sarcasm” tag.

Cypress

/s

CDAVIS

From article: “…VW Group of America’s new CEO Scott Keogh specifically said (via Reuters) that this new North American plant must be established before the automaker can officially reveal a new, undisclosed electric car that will be priced around $30-40k and will arrive in 2020…”
—————

My hope is that VW delivers…

Though seems far fetched that VW will in two years be in production of a not yet disclosed new EV at a not yet disclosed American factory. Perhaps “will arrive in 2020” means VW will in 2020 “reveal” a production ready concept EV with production to commence sometime thereafter… perhaps around 2022.

If so… 4 years is soon in traditional ICE years but a long way off in EV years.

By 2022 Tesla will likely be 2X-4X is current production volume and will be in volume production of Model Y.

antrik

Not really a new EV — just a US variant of the ID. CROZZ.

Also, there is absolutely no reason why they have to “disclose” a model more than two years before production. When they say “arrive”, that clearly implies it will be available for purchase. (Whether they will actually make it in time remains to be seen of course…)

Doggydogworld

VW – saving the climate one press release at a time!

louie

Considering the current state of our governmental leadership,would it not be reasonable for VW to rethink plans to expand in America?

Pushmi-Pullyu

No. The Orange One won’t be in office more than two more years at most (hopefully less!), and it will take VW that long to build a new factory.

Al D

All we know is something good will come out of all the controversy, not just from VW, but from many future EV makers. It makes sense for foreign manufacturers whose governments impose tariffs on our vehicles to make vehicles here to avoid retaliatory tariffs. Look at Toyota. They’ve proven the American worker can make a top quality vehicle at a competitive price.

Elon Is My Lord

Honda is making car half as cheap as BMW I wonder why BMW still hasn’t bankrupt.
So VW’s Half price of Model S really means half the car of Model S.

Milfan

“Fuhrer Herbert Diess

We should build a factory in Hawaii state on top of a mountain (volcano).
When volcano erupts, our factory will go up in smoke and then we can start selling diesel vehicles happily which will kill Americans slowly.

Diesel vehicles should be in our heart.”

That’s what they believe. More vacuum talk.

BEVfan

The main reason they should buy a GM facyory is the workforce. People that already had contact with the industry are much easier to train than people who worked as fishermen, let’s say.

phEVfan

But if those workers are union, VW will think twice.

midimal

VW will deliver in 2020 at high volume and much lower(than Tesla) prices – even for top models

antrik

150,000 vehicles planned for 2020 is a start, but not exactly “high volume” compared to Tesla.

Sure, their top models might be cheaper than Tesla — as long as they don’t intend to offer any premium models…

Sharpe

I’m tired of those “willbuilds” by VW. Until they actually build something all such statements are EV sabotage in disguise.

antrik

Only if we assumed there is a fixed amount of demand for EVs, and people delay purchases because they wait for VW… More likely though the extra awareness they create produces *more* demand for EVs.

Sharpe

People delay purchases of EVs because there is extremely low EV suply on the car market. And VW tries to limit this supply for as long as possible.

Nick

Used to love VW, even own a golf from those times BUT looking to replace it with a Kona, Tesla or a future leaf ( more range) VW is ALL EV TALK, NO RESULTS. This has been going on for a decade +. First & foremost they need to drop DIESEL. So long overdue… Let their factories run on 100 % renewables for the environment, pollution & to offset job losses for the german economy by creating jobs building new renewable energy. Those 2 together would give a BIG sign. The last step to convince us would be seeing mass production non compliance models for the working class which germans can be proud off if you compare it to the competition

antrik

They actually claimed their EV production will be carbon neutral…

Lars

Funny enough, there are at least four GM factories which can probably be equired starting late next year. There is one big one in Oshwaw, Ontario. Did I mention skilled labor force and other aux. businisses normally needed to run a car assembly plant.

Laurie Grinbergs

The General Motors plant is closing next year in Oshawa, Ontario, Canada putting thousands of people out of jobs. It would be an ideal location since the factory is already built.

EV fan

More talk, no action. They are not even going to sell an electric car in the U.S. , only an SUV.

Adam

Lure them into one of the gm plants that are closing in lordstown Ohio or hamtramck Michigan. Use taxpayer money to retool one of the plants, and you can save one of them through Volkswagen