CHATTANOOGA, Tenn. — Big news for the state of Tennessee after Volkswagen AG announced it will be building the company’s first electric vehicle manufacturing facility in North America in Chattanooga.
The project represents a $800 million investment by the company and will create an estimated 1,000 new jobs in Hamilton County.
“Today’s announcement is a tremendous win for Tennessee as it shows that our state continues to be a prime location for foreign direct investment,” Department of Economic and Community Development Commissioner Bob Rolfe said. “With a current workforce of 3,500, nearly 20 percent of Tennesseans employed by German companies are employed by Volkswagen. We appreciate Volkswagen for its continued confidence in our state and for the addition of 1,000 jobs in Hamilton County.”
Volkswagen’s current facility in Chattanooga is three million square feet, and produces the Atlas SUV and Passat. In March 2018, the company also announced it would be moving its production of the Atlas Cross Sport to the city as well. That vehicle is scheduled to begin production later this year.
“Volkswagen’s latest investment in Chattanooga is great news for our city. The 1,000 jobs this line will create means wages are growing and our city is stronger,” Chattanooga Mayor Andy Berke said. “For more than a decade, Volkswagen has proven time and again that when they invest in Chattanooga, their company and our community succeed together.”
The first electric vehicle are expected in 2022.
President Donald Trump and executives from VW and Germany’s other biggest automakers discussed the companies’ investments in the U.S. in December. Trump has been trying to pressure the German automakers into opening more factories in the U.S. and has threatened tariffs on imported vehicles.
Herbert Diess, CEO of Volkswagen AG, said the plant in Chattanooga “is a key part of our growth strategy in North America.” The facility sits on 1,400 acres (560 hectares) and currently employs about 3,500 people.
“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.,” Diess said in a statement.
Tennessee Gov. Bill Haslam, whose term ends in days, said in a statement that VW’s expansion in Chattanooga “underscores Tennessee’s manufacturing strength and highly-skilled workforce.”
Two other automakers, General Motors and Nissan, have large manufacturing plants in the state. More than 900 auto suppliers, including large ones such as Hankook Tire and Bridgestone Americas, operate in Tennessee, officials said.
Wolfsburg, Germany-based Volkswagen said it plans to commit almost $50 billion through 2023 toward the development and production of electric vehicles and digital services. The company is building its first dedicated electric vehicle production facility in Zwickau, Germany. It will also add electric vehicle production in the Chinese cities of Anting and Foshan in 2020 and in the German cities of Emden and Hanover by 2022.