How Volkswagen's Phaeton plant got a new life building EVs

It looks and feels more like an art museum or fancy loft than a car factory. The so-called Transparent Factory in Dresden, Germany, has Canadian Maple wood floors, soft indirect lighting and full-glass walls that required five soccer fields worth of glass. It was built specifically to assemble the luxury sedan -- about 14,000 were assembled from 2002 to 2016. But when the Phaeton was killed off, VW reassigned the factory to a greener, more futuristic assignment.

I visited the plant ahead of a workshop on Volkswagen's forthcoming MEB electric car platform. The facility, known in German as Die Gläserne Manufaktur, is the first and so far only Volkswagen plant to switch from building internal-combustion cars to only electric ones. Phaeton production ended there in March 2016. Thirteen months and 20 million euros later, e-Golf production began.

Today the Transparent Factory builds 72 e-Golfs per day with a theoretical capacity of 150 cars daily. That's about 14,000 cars annually, or just a small fraction of what VW can build at other factories. High demand for the electric hatchback forced VW to add a second shift at the factory in March 2018. But it only produces the car for Continental Europe: North American and right-hand-drive e-Golfs are built at VW's larger factory in Wolfsburg.

Still, e-Golf production outpaces the Phaeton's peak, which in its prime in 2011 tallied about 50 completed cars daily. Part of the reason more e-Golfs can be built is due to the car's simplicity. The Phaeton had 4,000 parts, whereas officials say the e-Golf has just 1,750. That's partly because it's a simpler hatchback than the luxurious Phaeton, but also partly because its all-electric drivetrain has fewer components. As a result, some parts of the 1.5-kilometer moving assembly line are unused. The slower pace of the line also means this factory can be used to experiment with new assembly processes, such as a robot that might install a car's headliner.

Located close to the historic city center of Dresden, the Transparent Factory doesn't all have that much physical space for inventory. Only painted body shells and battery packs are stored on site. All other parts are delivered on a just-in-time strategy from a storage facility about 3 miles away. The parts arrive on special trams that run on the same rail network used by Dresden's public-transport trams.

The Transparent Factory will continue to build only electric cars . With the e-Golf slated to die after 2020 (the eighth-gen Golf will not have an EV variant), the factory will instead switch over to building cars on Volkswagen's new MEB electric-car platform. Officials say it's still undecided which MEB car will be built here.

In addition to building cars, the plant serves as a museum (visitors can tour it for 7 euros (about $8), with about 100,000 visiting annually) and as a place to highlight VW's electric-car future. There's an incubator for tech startups, for instance, and an educational center local schoolchildren can visit on field trips. On my visit, the Pikes Peak record-setting ID R racing car was on display in the lobby, as well as a prototype Mk1 "Elektro."

Though its relatively low volumes mean it will never be a major player in building EVs -- Volkswagen plans to build EVs at 16 plants globally by 2022 -- the Transparent Factory will still play an important role in the company's future, even if its mission today is very different than when it first opened 16 years ago.

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