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Volkswagen Rapidly Expanding EV Production

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Volkswagen - Building an Electric Future
Volkswagen’s future
Photo: Volkswagen

As the electric vehicle wars heat up to unprecedented levels, Volkswagen isn’t pulling any punches. As of October 21, 2019, the German automaker announced plans to begin an aggressive expansion of its Chattanooga, Tennessee factory, for the purpose of increasing EV production.

The expansion will enable the plant to increase its capacity to roughly 240,000 units per year and is expected to allow Volkswagen to begin full-fledged production of its 100 percent electric compact SUV, the ID.4.

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That’s not all. CNBC recently reported that Volkswagen is also preparing two factories in China with the goal of increasing electric vehicle production to one million units by the end of 2022. With this kind of output, the automaker will position itself ahead of early market leaders.

The move into China is highly strategic on Volkswagen’s part, and is likely aimed directly at some of the most prominent players in the EV scene. While BMW, GM, Renault, and Tesla all debuted EVs before VW, the automaker is leveraging its enormous, global network of suppliers, factories, and workers to accelerate production and claim a majority of the market.

In addition to making use of its global production system, Volkswagen is also going all-in on the MEB — the brand’s dedicated electric vehicle architecture — in an effort to reduce the cost of EVs dramatically while speeding up production.

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While the Tesla Model 3 is widely seen as a credible player in the EV world, Volkswagen’s Chief Executive Herbert Diess is confident that Tesla’s infrastructure is lagging behind in terms of production facilities. “The question is, can you expand your production quickly enough? The capital intensity is increasing.”

Volkswagen is not the only brand making a big push to corner the EV market, but this week’s activity may be the most ambitious investment yet.

Sources: Seeking Alpha, CNBC