Volkswagen AG (VW) is doubling down on its commitment to the U.S. market, aiming to expand its market share from the current 4% to 8% by 2030, according to the companyās CFO, Arno Antlitz. Speaking at the World Economic Forum in Davos, Antlitz emphasized the need for increased investments in the U.S. to achieve this ambitious goal.
Despite scaling back its earlier target of a 10% market share, VW is steadfast in its vision to strengthen its foothold in North America. “To double market share, you have to be even more local,” Antlitz said, hinting at new projects aimed at aligning the company’s operations more closely with U.S. consumer demands.
Bolstering U.S. Presence with Localized Initiatives
Volkswagen has already committed $20 billion to its North American operations, which includes $10 billion allocated to its Chattanooga plant in Tennessee, $5 billion for a joint venture with electric vehicle (EV) maker Rivian, and $5 billion for its Scout subsidiary.
The CFO hinted at additional investments, potentially in research and development, to create more localized value. While declining to provide specific details, Antlitz noted that enhancing local production and innovation will be crucial for the carmaker to thrive in the U.S.
To address resistance to EV adoption among some U.S. consumers, Volkswagen plans to introduce range extendersāsmall combustion engines that charge EV batteries and extend their range. Already gaining traction in China, this technology will soon feature in Scout models, and potentially other VW vehicles, to attract customers hesitant to fully embrace EVs.
Navigating European Challenges Amid Cost-Cutting Efforts
As Volkswagen ramps up its U.S. operations, the company faces significant challenges in Europe, particularly in its home market of Germany. Recent cost-cutting agreements with labor unions mark the beginning of what Antlitz describes as a “hard journey” toward improving productivity and profitability.
“The plan will fail if factories do not speed up their output,” he said, underscoring the importance of efficiency gains to reduce fixed costs. These measures are part of a broader strategy to ensure sustainable growth in an increasingly competitive market.
Antlitz highlighted how these challenges reflect broader issues faced by Europeās industrial sector, including securing access to essential components such as batteries and chips. āWhatās right for Volkswagen might be right for Germany and also right for Europe,ā he said, stressing the interconnectedness of regional industrial policies and corporate success.
Trumpās Tariff Threats Loom Over VWās Strategy
Complicating matters further are potential tariffs from U.S. President Donald Trump, who has threatened to impose levies on imports from Europe, Mexico, and Canada. Volkswagenās North American supply chain, which heavily relies on its Mexican plant and Canadian battery operations, would be directly impacted by such measures.
While Antlitz declined to speculate on how the company might respond to new tariffs, he acknowledged the risks posed by these geopolitical uncertainties.
The Road Ahead for Volkswagen
With its eye on doubling its U.S. market share, Volkswagen is betting on a mix of strategic investments, localized production, and innovative technology to win over American consumers. However, the journey will not be without hurdles, as the company grapples with cost pressures in Europe and potential trade disruptions in North America.
As the global automotive landscape continues to evolve, Volkswagenās ability to adapt and innovate will determine its success in its key markets. “We need to do more value-added in the U.S.,” Antlitz concluded, signaling the companyās commitment to long-term growth in one of the worldās most competitive markets.