Volkswagen invests $7.1 billion in North America; will modernize its plants in Puebla and Guanajuato
By Elenne Castro
March 23, 2022
Volkswagen announced its commitment to invest in the amount of 7.1 billion dollars over the next five years in the North American region.
This capital injection is to boost its product portfolio, regional research and development, as well as its manufacturing capabilities.
Scott Keogh, president and chief executive officer of Volkswagen Group of America, Inc. , shared an update on the strategic roadmap , which locally integrates its internal combustion engine (ICE) and electric vehicle (EV) assembly, knowledge-focused engineering of batteries and software development in the United States.
With the above, Volkswagen aims to boost 55% of sales in the North American country to be completely electric by 2030.
"American ingenuity and manufacturing know-how are at the core of our growth strategy, and thousands of men and women work hard every day in North America to bring the Volkswagen brand to life for consumers," he said.
TAKE ADVANTAGE OF ALL THE CAPABILITIES
Regional capabilities will be crucial to sustaining the auto brand's success in the US market. Currently, more than 90% of the North American vehicle portfolio is assembled in this region, including the Atlas and Atlas Cross Sport SUVs in Chattanooga, as well as the Tiguan, Taos and Jetta in Puebla, Mexico.
Volkswagen 's mission is to strengthen these capacities in its turn towards electric mobility.
This strategy is based on the company preparing its Chattanooga facility for local production of electric vehicles . Assembly of the ID.4 SUV is set to start in 2022, primarily from regional suppliers.
Likewise, it plans to modernize its factories in Puebla and Silao, Mexico , for the assembly of electric vehicles and components (such as electric motors ), by the middle of the decade.
Beyond assembly, Volkswagen aims to localize all major design and engineering responsibilities for the "vehicle headgear " of products destined for domestic markets by 2030.
This approach reflects the company's emphasis on the demands of US consumers, while expanding the global scale of the Group 's vehicle platforms (MEB and future SSP) .
FULLY ELECTRIC BOOST
Volkswagen will begin phasing out gasoline-powered vehicles from its American lineup, aiming to exit sales early in the next decade, while focusing on more desirable models.
Instead, it will move forward on its electric pipeline, including US assembly of the ID.4 in 2022, the ID. Buzz electric minibus in 2024 and new electric SUVs from 2026. In total, the Volkswagen Group brands plan to introduce more than 25 new battery electric vehicles (BEVs) to American consumers through 2030.
As part of its preparation to launch the American-assembled ID.4 , Volkswagen has invested more than $2.7 billion in supplier partnerships across the North American continent, including its battery partnership with SK Innovation .
In addition, at a global level, it aims to develop a production of battery cells in the United States , to meet the growing demand for batteries in all its brands. The Group is currently evaluating governance and finance models, and aims to finalize decisions by 2022.
Beyond supply, Volkswagen is expanding its battery knowledge in the United States. In May 2022, it will begin operations of its new Battery Engineering Laboratory (BEL) in Chattanooga; As a result of a $22 million investment, BEL will enable the company to test and validate batteries for all electric models in the US market.
On the research side, the NAR Battery Center of Excellence (CoE) will accumulate knowledge and research capabilities in battery cell technology.
The CoE collaborates closely with technology partners Quantumscape , which is advancing solid-state battery technology, and 24M , which is reinventing battery cell design.
In the United States, Volkswagen made a commitment to software and digital solutions for American consumers . As part of that, the brand plans to bring over-the-air (OTA) updates and new software features, like plug and charge , to the ID.4 this year.
Volkswagen is also working with CARIAD SE , the Group's software entity, to support the formation of its North American subsidiary in 2022, with software units in Seattle and the California Bay Area, the goal is to strengthen the footprint . digital company in America .