Volkswagen Continues Push to Take Over Electric Vehicle Market

The German automaker’s recently opened its electric vehicle battery lab in Chattanooga and it looks to dominate the EV market.

Fifty years ago, an 11-person team got together at Volkswagen’s  (VWAGY) – Get Volkswagen AG ADR Report Centre for Future Research in Wolfsburg, Germany. 

The team had been assembled in response to soaring oil prices and fuel shortages–sound familiar?–and the automaker wanted to explore alternative powertrains that would power Volkswagen’s first all-electric concept vehicle.

The group’s efforts produced the 1972 Elecktro Bus, which was introduced at the Hannover Trade Fair that year.

The Elecktro Bus, which had a range of 25 miles and a top speed of 43 miles per hour, had a short production run of about 120 vehicles, but it marked the beginning of Volkswagen’s journey into electrification. 

Taking On Tesla

The world is again facing spiraling gas prices, but now the major automakers planning to electrify their fleets. 

Volkswagen is looking to dominate this brave new market, with CEO Herbert Diess recently stating that the maker of the iconic Beetle can pull ahead of Elon Musk’s Tesla  (TSLA) – Get Tesla Inc. Report and become the world’s largest seller of electric vehicles by 2025.

Earlier this year, the automaker said it is putting down $7.1 billion in North America over the next five years to push its electrical and digital makeover as Volkswagen aims to drive 55% of U.S. sales to be fully-electric by 2030.

Volkswagen plans to introduce more than 25 new battery-electric vehicles to American consumers through 2030.

The company said more than 90% of its North American vehicle portfolio is assembled in North America, including the Atlas and Atlas Cross Sport SUVs in Chattanooga, TN, as well as Tiguan, Taos and Jetta in Puebla, Mexico.

And on June 8, Volkswagen of America said it opened its electric vehicle battery lab in Chattanooga, to test and optimize batteries for all electric vehicles in the American marketplace. 

The company said that the $22 million, 32,000-square feet facility is the latest step in its commitment to boost its product portfolio, research and development, and manufacturing capabilities in North American.

Investing ‘Record Amounts’

“When we began making investments in electrification, it was because we saw a future for our industry and the North American region in which Volkswagen could take a leadership position,” Scott Keogh, Volkswagen Group of America’s president and CEO, said in a statement. “The Battery Engineering Lab helps make that vision a reality today, accelerating us decades into the future with advanced battery engineering to support our expanding EV push in North America.”

The first American-assembled Volkswagen EV, the ID.4 compact SUV, is set to roll off the assembly line this year, the company said.

“Volkswagen has invested record amounts in manufacturing capabilities and new product development to reach its goals,” said Brian V. Larson, marketing professor Widener University. “New and renovated manufacturing facilities are being brought online in multiple countries, giving VW global capacity and shortening its supply chains as it brings manufacturing nearer suppliers.”

Moreover, Larson said Volkswagen is investing in supply chain component manufacturing like facilities to make electric batteries, a critical factor in EVs. 

“This will ensure that VW manufacturing ability is undeterred by supply chain issues as much as possible,” he said. “What’s more, the biggest market for VW, the United States, is going to see a stronger VW presence in for its electric vehicle lineup.”

‘A Stronger Presence’

What’s more, Larson said, the United States–the company’s biggest market–is going to see a stronger VW presence for its electric vehicle lineup.

“VW is planning to launch a number of new EV models with some of the models bound specifically for the American market with a distinctly American marketing effort behind it,” he said. “For instance, the iconic Scout brand name, owned by VW, will be resurrected in 2026 as a rugged off-road EV competitor in the Wrangler/Bronco class, and manufactured in the U.S.”

The company said last month that it would introduce an electrified version of the Scout some 40 years after the original version of the vehicle rolled off the assembly lines.

Earlier this year, Volkswagen unveiled its electric ID. Buzz van in Paris. For those of a certain age, the microbus called up images of the company’s classic bus, a favorite of the Sixties’ counterculture.

The Volkswagen ID Buzz has been in development for more than half a decade and production recently began at the company’s plant in Hannover–the same city where the 1972 Elecktro Bus was introduced all those years ago.

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