VW is to build a new electric vehicle at its plant in the US city of Chattanooga, expecting to sell a million of them by 2025. The German giant is also moving closer to announcing its partnership with Ford.
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VW's CEO Herbert Diess made the announcement at the North American International Auto Show in Detroit on Monday.
The 1,400-acre (560-hectare) Chattanooga site "is a key part of our growth strategy in North America" Diess said. VW currently employs about 3,500 people at the Tennessee plant and believes it can expand more rapidly than building a new facility elsewhere, although Diess admitted there were "pros and cons" to the decision.
"It's not easy to attract further labor there — the labor market is a constraint," Diess said. "Still, we have invested a lot, we have a lot of governmental support there, a strong team there. It makes more sense to increase capacity in Chattanooga." The $800-million (€697-million) project is expected to generate an extra 1,000 jobs.
German car companies have been under pressure from the Trump administration to increase their investments in the US.
Partnership with Ford
Diess also confirmed discussions with Ford over a partnership which have been taking place in recent months, with a conference call involving Ford CEO Jim Hackett and other executives planned for Tuesday.
VW and Ford have been discussing sharing the costs of developing electric and autonomous vehicles and sharing some factory space.
Diess said the partnership would include cooperation on small commercial vehicles, vans and midsize pickup trucks — a market where VW is not a major player. "We decided to join forces there and we will become very competitive together in this segment," Diess said Monday without giving further details.
Modular electric toolkit chassis (MEB)
VW will use a modular electric toolkit chassis (MEB) at its site in Chattanooga. This was designed as the basic building block for its electric vehicles (EVs) to consolidate all the electronic controls and reduce the number of microprocessors in each vehicle.
Volkswagen is building the first dedicated EV production facility in Zwickau, Germany with MEB production due to start by the end of this year. It also plans to add EV production to faciities in Anting and Foshan in China next year and in Emden and Hanover, Germany by 2022.
Tennessee state officials welcomed the decision. Department of Economic and Community Development Commissioner Bob Rolfe said on Monday: "Today's announcement is a tremendous win for Tennessee as it shows that our state continues to be a prime location for foreign direct investment."Diess said that the Volkswagen Group of America's CEO Scott Keogh is to lead the Volkswagen electric vehicle management team.
Dieselgate: A timeline
VW's emissions scandal plunged the automaker into its deepest crisis ever. It brought with it everlasting damage to VW's reputation and massive fees and penalties — not to mention compensation claims from car owners.
Image: picture-alliance/dpa/J. Stratenschulte
The disaster unfolds — September 2015
About two weeks after Volkswagen admitted behind closed doors to US environmental regulators that it had installed cheating software in some 11 million of its diesel vehicles worldwide, the Environmental Protection Agency shared that information with the public. It was September 18, 2015. The ensuing crisis would eventually take a few unexpected turns.
Image: picture-alliance/dpa/O. Spata
The boss must go, long live the boss — September 2015
Volkswagen's then-CEO Martin Winterkorn (above) had little choice but to step down several days after news of the scandal broke. In September 2015, he tendered his resignation, but retained his other posts within the Volkswagen Group. Winterkorn's successor was Matthias Müller. Until taking the reins at VW, Müller had been the chairman at Porsche, a VW subsidiary.
Image: picture-alliance/Sven Simon
Raiding headquarters — October 2015
Regulators in the US weren't the only ones investigating VW. Authorities in Lower Saxony, the German state in which VW is based, were also scrutinizing the company. On October 8 2015, state prosecutors raided VW's headquarters along with several other corporate locations.
Image: picture-alliance/dpa/P. Steffen
Hell breaks loose — January 2016
On January 4, 2016, the US government filed a lawsuit against VW in Detroit, accusing the German automaker of fraud and violations of American climate protection regulations. The lawsuit sought up to $46 billion for violations of the Clean Air Act.
Image: picture-alliance/dpa/A. Burgi
Quit or forced out? — March 2016
In March 2016, the head of VW in the US, Michael Horn, resigned. In the initial days and weeks after the scandal broke, he was the one US authorities turned to for information. He issued an official apology on behalf of the automaker, asking for the public's forgiveness.
Image: Getty Images/C. Somodevilla
Settlement — October 2016
On October 25 2016, a US judge approved a final settlement that would have VW pay $15.3 billion. In addition, affected cars would be retrofitted with better, non-deceptive hardware and software, or else VW would buy them back completely from customers.
Image: picture-alliance/dpa/P. Pleul
Imitators — July 2017
When dieselgate first emerged in 2015, analysts said it was likely other car makers were also cheating tests. But it wasn't until 2017 that other companies were targeted in probes. In July, German authorities launched investigations into luxury car makers Porsche and Daimler for allegedly cheating emissions tests. Others, such as Audi and Chrysler, have also been hit by similar allegations.
Image: picture-alliance/dpa/F. Kraufmann
Public still supportive — December 2017
Despite dieselgate, VW has managed to keep the emissions scandal from utterly tarnishing its image. According to several polls, between 55 to 67 percent of Germans continue to trust the automaker. In the US, polls show that roughly 50 percent still believe the German company produces worthwhile vehicles.
Image: picture-alliance/dpa/C. Klose
Fuming over monkeys — January 2018
In late January, however, VW suffered another heavy blow over reports that the company experimented on monkeys and made the animals inhale diesel fumes. To make matters worse, a separate experiment that had humans inhale relatively harmless nitrogen dioxide was revealed at the same time. Some media wrongly interpreted this to mean humans were also inhaling toxic fumes.
Image: picture-alliance/dpa/F. Gentsch
Canadian court demands millions — January 2020
Years after the scandal that caused Volkswagen to pay CAN$2.4 billion (US$1.83 billion), a court in Toronto order a further fine of CAN$196.5 million. Volkswagen pleaded guilty of violating in environmental laws. Prosecutor Tom Lemon noted that the fine was "26 times the highest fine ever for a Canadian environmental offence."