Volkswagen EV production will begin at the company’s Chattanooga facility in 2022.  The German automaker says it will invest $800 million in its Tennessee facility, making it VW’s first electric vehicle facility in North America.  Volkswagen photo.

Volkswagen EV project to generate 1,000 jobs

Volkswagen says it will invest $800 million in its Chattanooga, Tennessee, facility to make it the company’s first electric vehicle facility in North America.

The announcement came on Monday and the German automaker says the project is expected to generate 1,000 additional jobs.  The first Volkswagen EV built in Chattanooga is expected to roll off the production line in 2022.

“The shift toward electric vehicles is a trend that can be seen worldwide,” said Tennessee Governor Bill Haslam.

Volkswagen says it expects to sell 150,000 EVs by 2020 and 1 million by 2025 worldwide.  Along with the upgraded Chattanooga plant, VW is also building an electric vehicle facility in Zwickau, Germany, and is adding EV production to two of its plants in China and two other facilities in Germany.

“The U.S. is one of the most important locations for us, and producing electric cars in Chattanooga is a key part of our growth strategy in North America,” said Volkswagen AG CEO Herbert Diess.

“Together with our ongoing investments and this increase in local production, we are strengthening the foundation for sustainable growth of the Volkswagen brand in the U.S.”

Volkswagen Group of America CEO Scott Keogh will be in charge of the WV EV management team according to Diess.

VW employs 3,500 employees in Tennessee and by the end of the year, the company says it will have invested $2.3 billion in the plant which currently builds the Atlas SUV and Passat sedan.  This year, the Chattanooga facility will also begin building the Atlas Cross Sport.

Globally, sales of new electric vehicles topped 1 million in 2017.  A report by McKinsey & Co. forecasts that could nearly quadruple by 2020.

To date, China has been a leader in EV sales.  China, Norway, California, France and the UK are introducing tougher emissions regulations, moves that are expected to boost sales of EVs.

According to Tennessean.com, state officials have not yet provided information on any financial incentives for VW, noting they are still in negotiations.  They say the agreement will be made public once the project is contracted.

The Chattanooga Free Press says that so far, the Tennessee plant has received over $800 million in federal, state and local incentives in the past 10 years.