Volkswagen said on Monday it was investing $800 million to build a new electric vehicle at its plant in Chattanooga, Tennessee, and scheduled a briefing with Ford Motor for Tuesday on their efforts to forge a global alliance.
The German automaker said in an announcement at the Detroit Auto Show that it was adding 1,000 jobs at the Chattanooga plant and that electric vehicle production there would begin in 2022, reports Reuters.
Volkswagen Chief Executive Herbert Diess said the company was considering building luxury Audi vehicles in the United States but that no decisions had been made.
German automakers have been under pressure from US President Donald Trump to increase their investments in the United States. Diess and counterparts from German automakers BMW AG and Daimler AG met with Trump at the White House in December to urge the administration not to go through with a threat to slap tariffs on European cars.
The Tennessee investment “is a signal to the government that we are really committed to the United States,” Diess told reporters at the auto show.
Ford and VW confirmed on Monday they would hold a joint conference call on Tuesday “to provide an update on the companies’ ongoing discussions regarding a global alliance.”
Diess and Ford executives ducked questions about how broad their alliance could be, beyond previously disclosed plans to collaborate on commercial vehicles and potentially midsize pickup trucks. Ford and VW have been discussing collaboration on electric and autonomous vehicles.
Both Ford and VW face mounting costs for developing electric and autonomous vehicles. Diess told reporters that VW could shoulder its ambitious $91 billion electrification plan on its own but was open to partnerships to increase economies of scale.
Volkswagen is building the first dedicated EV production facility in Zwickau, Germany, starting MEB production by the end of 2019.
