Tennessee is Likely Locale for Volkswagen's New EV Factory

Matt Posky
by Matt Posky

Last month, Volkswagen global brand head Herbert Diess said that Chattanooga would be the likely location for the company’s new electric vehicle plant. But he was also careful to specify that VW had made “no formal decision” on the matter.

While it’s always best to wait for the press release to say anything definitive, the automaker has begun posting openings for specialized positions that would relate to its upcoming MEB platform in Tennessee. Perviously, the automaker had only said it intended to build MEB vehicles at its plant in Zwickau, Germany, beginning with the I.D. hatchback model in 2019. It also mentioned it was planning a facility in China while the American site was still under consideration.

Although, with electric vehicles still stuck in a niche market, it might not make sense for VW to establish a new worksite for them. That’s one reason Chattanooga is the likely candidate. Instead of setting up a new facility, the company could expand upon an existing one.

“Chattanooga is highly underutilized [in its current form],” Dave Sullivan, a senior analyst with AutoPacific, told Automotive News. “If VW’s plant can mimic Nissan’s Smyrna plant — building a sedan, crossover and an EV under the same roof — they will be well on their way towards increased capacity utilization.”

Presently, the 3.4-million-square-foot Tennessee plant assembles two models: the Atlas crossover and the Passat sedan. While the Atlas is expected to rake in additional sales as the global crossover craze continues, VW has witnessed Passat volume shrink in North America every year since 2013. Annual sales for the model now represent about half of their post-recession peak and don’t look like they’ll be bouncing back any time soon.

Chattanooga is also the only automobile manufacturing plant in the entire world to receive a top rating in the LEED green building certifications. Receiving a large amount of its electrical power from a nearby solar park and reusing rainwater for cooling and restrooms, the site would make a primo location for VW to continue its green initiative. Building energy-efficient cars at an energy-efficient factory sounds like just the ticket to help the world forget about that pesky diesel emissions scandal from 2015.

While the I.D. hatchback is the first electric model slated to go into production, North America may not see assembly of that particular vehicle. Instead, we’re banking on VW focusing upon larger models — like the Crozz and Microbus — within the United States.

[Image: Volkswagen Group]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Stingray65 Stingray65 on Dec 11, 2017

    All the tax breaks that TN has given VW to build this plant mean that producing a profitable vehicle would normally result in a big loss of taxable revenue, but since EVs don't make a profit they don't lose any revenue. On the other hand, how much capacity will these EVs utilize - since they are such poor sellers and totally dependent on subsidies that might be phased out - maybe not too many green jobs in this announcement.

  • Loopy55 Loopy55 on Dec 11, 2017

    VW intends to make a profit on these cars. They have stated that the MEB platform will allow them to sell EV's at prices comparable to ICE cars without government subsidies.

  • Tassos Obsolete relic is NOT a used car.It might have attracted some buyers in ITS DAY, 1985, 40 years ago, but NOT today, unless you are a damned fool.
  • Stan Reither Jr. Part throttle efficiency was mentioned earlier in a postThis type of reciprocating engine opens the door to achieve(slightly) variable stroke which would provide variable mechanical compression ratio adjustments for high vacuum (light load) or boost(power) conditions IMO
  • Joe65688619 Keep in mind some of these suppliers are not just supplying parts, but assembled components (easy example is transmissions). But there are far more, and the more they are electronically connected and integrated with rest of the platform the more complex to design, engineer, and manufacture. Most contract manufacturers don't make a lot of money in the design and engineering space because their customers to that. Commodity components can be sourced anywhere, but there are only a handful of contract manufacturers (usually diversified companies that build all kinds of stuff for other brands) can engineer and build the more complex components, especially with electronics. Every single new car I've purchased in the last few years has had some sort of electronic component issue: Infinti (battery drain caused by software bug and poorly grounded wires), Acura (radio hiss, pops, burps, dash and infotainment screens occasionally throw errors and the ignition must be killed to reboot them, voice nav, whether using the car's system or CarPlay can't seem to make up its mind as to which speakers to use and how loud, even using the same app on the same trip - I almost jumped in my seat once), GMC drivetrain EMF causing a whine in the speakers that even when "off" that phased with engine RPM), Nissan (didn't have issues until 120K miles, but occassionally blew fuses for interior components - likely not a manufacturing defect other than a short developed somewhere, but on a high-mileage car that was mechanically sound was too expensive to fix (a lot of trial and error and tracing connections = labor costs). What I suspect will happen is that only the largest commodity suppliers that can really leverage their supply chain will remain, and for the more complex components (think bumper assemblies or the electronics for them supporting all kinds of sensors) will likley consolidate to a handful of manufacturers who may eventually specialize in what they produce. This is part of the reason why seemingly minor crashes cost so much - an auto brand does nst have the parts on hand to replace an integrated sensor , nor the expertice as they never built them, but bought them). And their suppliers, in attempt to cut costs, build them in way that is cheap to manufacture (not necessarily poorly bulit) but difficult to replace without swapping entire assemblies or units).I've love to see an article on repair costs and how those are impacting insurance rates. You almost need gap insurance now because of how quickly cars depreciate yet remain expensive to fix (orders more to originally build, in some cases). No way I would buy a CyberTruck - don't want one, but if I did, this would stop me. And it's not just EVs.
  • Joe65688619 I agree there should be more sedans, but recognize the trend. There's still a market for performance oriented-drivers. IMHO a low budget sedan will always be outsold by a low budget SUV. But a sports sedan, or a well executed mid-level sedan (the Accord and Camry) work. Smaller market for large sedans except I think for an older population. What I'm hoping to see is some consolidation across brands - the TLX for example is not selling well, but if it was offered only in the up-level configurations it would not be competing with it's Honda sibling. I know that makes the market smaller and niche, but that was the original purpose of the "luxury" brands - badge-engineering an existing platform at a relatively lower cost than a different car and sell it with a higher margin for buyers willing and able to pay for them. Also creates some "brand cachet." But smart buyers know that simple badging and slightly better interiors are usually not worth the cost. Put the innovative tech in the higher-end brands first, differentiate they drivetrain so it's "better" (the RDX sells well for Acura, same motor and tranmission, added turbo which makes a notable difference compared to the CRV). The sedan in many Western European countries is the "family car" as opposed to micro and compact crossovers (which still sell big, but can usually seat no more than a compact sedan).
  • Jonathan IMO the hatchback sedans like the Audi A5 Sportback, the Kia Stinger, and the already gone Buick Sportback are the answer to SUVs. The A5 and the AWD version of the Stinger being the better overall option IMO. I drive the A5, and love the depth and size of the trunk space as well as the low lift over. I've yet to find anything I need to carry that I can't, although I admit I don't carry things like drywall, building materials, etc. However, add in the fun to drive handling characteristics, there's almost no SUV that compares.
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