Volkswagen plans to build electric vehicles in North America

Volkswagen plans to build electric vehicles in North America

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As part of its vision for 2025, Volkswagen announced an aggressive plan to triple its profit margin to 6 percent, while also selling 1 million electric vehicles which the german automaker plans to build in North America by 2021.

The new emphasis on electrics comes in the wake of the disastrous Dieselgate scandal that has left the reputation of one of the world’s largest automakers in tatters. To pay for the switch to electrics, VW plans to use some of the US$ 2.7 billion it will save by scrapping poorly performing conventional cars.

“Over the next few years, Volkswagen will change radically,” Herbert Diess, chief of the VW brand, said in a statement. “Very few things will stay as they are. The electric car will become the strategic core of the VW brand.”

Currently, VW builds the Jetta sedan, Golf hatchback and Beetle in its Puebla, Mexico factory. VW’s single assembly plant in the U.S. is in Chattanooga, Tenn. The Chattanooga facility currently makes a version of the Passat sedan for North America. The three-row Atlas crossover is also scheduled to be built there. “We will be significantly stepping up our activities in the U.S.A. The main focus will be on the key segments in the country, large SUVs and limousines,” Diess continued.

Volkswagen is facing a carload of challenges brought on by its self-inflicted diesel emissions scandal. It is fighting to slash expenses so it can cover the continuing drain caused by the diesel cheating. The automaker is still awaiting the completion of a criminal probe in the U.S. that could cost it billions. And, the Federal Trade Commission has yet to complete its probe into charges of false advertising. Meantime, the automaker is still facing legal challenges in Germany, France, Italy, South Korea and India, among other places. And, there are promises of new probes as a second defeat device was reportedly found recently by investigators.

Volkswagen and its powerful unions reached a landmark agreement where the automaker attained as many as 30,000 job cuts worldwide. Most of the job cuts are slated to occur outside the United States. The estimated savings of this plan is nearly 4 billion euros, or slight over $4 billion.


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