Volkswagen to Spend US$7.1 billion to Boost Product Line-Up in North America


Volkswagen announced its commitment of US$7.1 billion over the next five years in the North American region (NAR) to boost its product portfolio, regional R&D and manufacturing capabilities.

Scott Keogh, president and CEO of Volkswagen Group of America, Inc., shared an update on the strategic roadmap with media. By locally integrating its combustion-engine (ICE) and electric vehicle (EV) assembly, American-focused engineering, battery know-how, and software development, Volkswagen aims to drive 55 per cent of U.S. sales to be fully-electric by 2030.

“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,” said Scott Keogh, president and CEO, Volkswagen Group of America, Inc. “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.”
Keogh announced that Volkswagen will begin to phase out gasoline-powered vehicles from its American line-up, aiming to exit from sales at the beginning of the next decade, while focusing on the most desirable models. In its place, Volkswagen will advance its electric line-up, including the American-assembled ID.4 in 2022, the ID. Buzz electric microbus in 2024, and new electric SUVs from 2026. In all, Volkswagen Group brands plan to introduce more than 25 new battery electric vehicles (BEVs) to American consumers through 2030.
Keogh emphasized that regional capabilities will be crucial to sustain Volkswagen’s success in the American marketplace. Currently, more than 90 per cent of Volkswagen’s vehicle portfolio for North America is assembled in North America, including the Atlas and Atlas Cross Sport SUVs in Chattanooga, TN, as well as Tiguan, Taos and Jetta in Puebla, Mexico. Volkswagen aims to strengthen these capabilities in its pivot to electric mobility. This strategy builds on the company’s preparation of its Chattanooga facilities for local EV production. Assembly of the ID.4 SUV is poised to begin in 2022, sourced mostly from regional suppliers. Volkswagen also plans to upgrade its factories in Puebla and Silao, Mexico, for the assembly of electric vehicles and components (such as e-motors), by the middle of the decade.

As part of its preparation to launch the American-assembled ID.4, Volkswagen has invested more than US$2.7 billion in supplier partnerships throughout the North American continent, including its battery partnership with SK Innovation. In addition, the global Volkswagen Group aims to build up a battery cell production in the United States to meet the growing demand for batteries across its brands.