Volkswagen Takes on Tesla With Plan to Build Futuristic EVs in the US

Volkswagen is taking on Tesla in the American electric car space, with a plan to produce a new vehicle at its plant in Chattanooga, Tennessee. The plan, announced at the Detroit Auto Show on Monday, will see an $800 million investment in new technologies that will create over 1,000 new jobs. The firm also reiterated a number of its plans for future electric vehicles, including one based on the hippie van concept that turned heads with its futuristic design.

“Automobiles are a serious business in Tennessee,” state governor Bill Haslam told the audience, before outlining the company’s 10-year history in working with the state. “When they started talking about electric vehicles and where it might be produced, we obviously were very hopeful they would choose Tennessee.”

The move comes amid a strengthening market for electric vehicles in the United States. The Tesla Model 3, the firm’s cheapest-ever electric car that’s built in the United States, brought in the most revenue for a single vehicle in the whole year and ranked as the fifth best-selling sedan in the second half of 2018 with over 110,000 sales. Tesla now ranks as the fourth most-valued automaker in the world. In the month of September, Tesla took all three top spots in electric car sales as the Nissan Leaf fought the Chevrolet Bolt for fourth place. The American electric car market is set to jump from two percent of the overall car market in 2018 to 14 percent of the market by 2025.

Volkswagen expects its first electric vehicle to roll out of the Chattanooga facility by 2022. It forms part of a wider shift to electrification for the firm, which is targeting 150,000 electric cars sold globally by 2020 and one million by 2025. The firm’s first all-electric production facility, based in the town of Zwickau in Germany, is set to start production by the end of this year.

The facility will produce cars using the modular electric toolkit chassis, a platform that will be used across the company. It’s unclear at this stage what vehicle Volkswagen will produce at its Chattanooga facilities, but it has some big plans for cars that will use this platform. The first vehicle to use it will be a production version of the ID Crozz, a concept vehicle unveiled at last year’s North American International Auto Show:

The final vehicle, the company claims, will have the space of a midsize SUV in a vehicle that takes up the space of a compact SUV. Volkswagen is also planning a vehicle based on the ID Buzz concept van, first debuted at the Detroit show two years ago.

Whether some of these concept vehicles’ more outlandish features will make the cut remains to be seen. The ID Buzz concept, which used a 111kWh battery to reach a range of 270 miles, enabled drivers to press in the steering wheel to enter a fully-autonomous driving mode.

Volkswagen expects to start selling the ID Crozz to American consumers by 2020. Whether it will be enough to fend off Tesla, expected to also unveil a Model Y compact SUV in March, remains to be seen.

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