VW Invests $7.1B Into North America, Targets 55 Percent EV Sales By 2030

VW to invest $7.1B in North America and launch 25 EVs by 2030

Volkswagen announces its investment in North America in the next five years to be $7.1 billion. It is going to launch 25 electric vehicles by 2030. Additionally, the demand for electric microbuses is increasing. Initially, it will be imported from the Hanover plant in Germany. Then the electric microbus will be assembled in Mexico or the US.

VW Invests $7.1B Into North America, Targets 55 Percent EV Sales By 2030
Image credits- Motor1

U.S. demand for the ID.Buzz is “through the roof,” Keogh said at a media briefing on Monday. The upshot is that “there could be an opportunity” to build the vehicle in North America, he said. VW’s North American investment plan is part of a broader five-year global spending plan, announced in December, that earmarks $98 billion for “e-mobility, hybridization and digitalization,” including the construction of battery plants and partnerships with battery material suppliers.

Furthermore, the North American figure does not include a provision of $1.8 billion or more for additional local battery production to supplement battery cells that VW is buying from SK Innovation’s Georgia plants, Keogh said. VW aims to establish dedicated cell production to support its ambitious electric vehicle rollout in the region, he said. Also, the German automaker expects at least 50% of its U.S. vehicle sales to be fully electric by 2030, Keogh said. That compares with a 70% target for electric vehicles in Europe by 2030.

ID crossover production

VW will begin to phase out its gasoline-powered models in North America, with the aim of exiting sales of combustion-engine vehicles early in the next decade.

VW has begun pilot production of the ID.4 electric crossover at its Chattanooga plant in Tennessee, in preparation for a fall launch, and is upgrading its Mexican plants in Puebla and Silao to start building electric vehicles, motors, and related components by mid-decade. Keogh said VW expects to add as many as four electric SUVs to its U.S. portfolio, starting in 2026, that would cover the same segments now served by gasoline-powered models, including Taos, Tiguan, and Atlas.

The expansion comes as the automaker is focused on launching electric microbus in the US. At the same time, the costs of electric vehicle-making materials like battery materials are increasing. Automakers are struggling to keep up with the rising prices and keep the vehicles at affordable ranges. Volkswagen is already ahead by joining alliances with the battery raw materials makers in Indonesia. This corresponds to an annual output of around 120,000 tonnes of nickel and 15,000 tonnes of cobalt. Global nickel prices have surged almost 400% this year due to the Ukraine crisis, as Russia is a major supplier and its invasion of Ukraine and the subsequent imposition of sanctions on Moscow by the West lit a fire under an already hot market.