Volkswagen to build EV plant in Tennessee

Breana Noble
The Detroit News
Dr. Herbert Diess of VW with Tennessee Gov. Bill Haslam as they announce plans for a new plant there.

Detroit — Volkswagen AG said Monday it is investing more than $800 million into a second plant in Chattanooga, Tennessee.

The German automaker made the announcement at the North American International Auto Show. The facility is a part of VW's e-mobility future in the United States and will create 1,000 new jobs. The first electric vehicles are expected to roll out in 2022.

"We've always said we will build electric vehicles right here in North America," Volkswagen CEO Herbert Diess said.

Diess said the company sees an opportunity to continue growing its market share in the United States with electric vehicles.

Read more: VW introduces restyled, tech-ified Passat for 2020

The company broke ground on its first facility that builds the Atlas SUV and Passat sedan in 2008. Diess said that existing relationship and the talent pool in Tennessee led VW to choose Chattanooga again.

"Ten years ago, when Volkswagen chose to build a plant of its very own in Chattanooga, it was a big deal," outgoing Tennessee Gov. Bill Haslam said. "We're excited about the new vehicle, and we're planning on doing the same thing we've been doing, and that's is to provide world-class workers."

Volkswagen already employs more than 3,000 employees in Tennessee and has an apprentice program. By the end of the year, VW expects to have invested more than $2.3 billion in that facility.

The automaker plans to introduce electric vehicles in 2020, including in the U.S. market. Its first will be the I.D. Cross, which has the footprint of a sports utility vehicle and the interior space of a midsize SUV. Following that will be the I.D. Buzz, the successor to its iconic microbus.

Volkswagen of America Inc. CEO Scott Keough said the company chose an SUV as its first electric vehicle to help with adoption.

"We wanted something that's in the sweet spot of the U.S. market," he said.