Volkswagen is planning to set up a new manufacturing facility for electric vehicles in North America and the company is looking out for a suitable location, informed the CEO of the company Scott Keogh on Wednesday.
“We are 100 percent deep in the process of ‘We will need an electric car plant in North America,’ and we’re holding those conversations now,” Keogh said while talking to reporters at the Los Angeles Auto Show.
This move by VW is in sharp contrast to the announcement made by General Motors a day ago where in the largest US auto maker said that it would cut thousands of jobs in North America and stop production of its slow selling models which are produced in 5 factories in North America of which four are in the US.
The CEO of Volkswagen Group of America said that the company plans to manufacture and launch an electric vehicle in the price range of $30,000 to $40,000. The German car maker is however tight lipped about t he specifications of the model.
Keogh said that the new model would initially be sourced from outside of the US so that the company is able to meet the timeline and ultimately the company would begin production at the new factory.
According to a report by Reuters, the company is considering purchasing a an existing plant in Chattanooga, Tenn., which has enough scope for additional production, the CEO also said. The identified plant currently manufactures the Passat and Atlas models.
Earlier last month, the largest carmaker in Europe VW had announced expenditure of about $50 billion on what it calls an “electric offensive”, by 2023. Under this strategy, the company will embark on an aggressive strategy to develop electric cars, self-driving technology and other auto technology advancements.
Last year was a tumulus year for Volkswagen. The German car maker first accepted the charges against it of committing wire fraud and customs violations and obstruction of justice. It was also held responsible violation of the Clean Air Act in relation to the highly publicised diesel-emissions cheating episode that had started in the US and later spread to other European countries as well. And in relation to that scandal, a seven year jail sentence was served to a senior Volkswagen executive,
“The market timing actually is quite perfect,” Keogh told reporters. “You need to have this intersection of, ‘Can you get costs down enough that you can produce a car at that price point, make enough money, have the technology capabilities that this is a car that we would want to put in the marketplace, and have market acceptance?’ ”
It is expected that the planned electric car models of VW priced at $30,000 to $40,000 would give competition to an upcoming electric car model from Tesla which would be priced at $35,000. The new cheaper version of the Model 3 has been announced to be launched in 2019 as announced by Tesla CEO Elon Musk even though the company had failed to launch the car several times in the past.
(Adapted from NPR.org)