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Volkswagen will build battery packs in Tennessee as part of $800M investment

VW surprised with the announcement as it broke ground on planned construction at its Tennessee-based plant.

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Volkswagen Chattanooga plant rendering

VW is making big moves at its Chattanooga facility.

Volkswagen

If it's an electric car from Volkswagen, it will come from the state of Tennessee. That much the German automaker already shared, but the company surprised with an announcement on Wednesday saying it will also build a battery pack assembly plant at its Chattanooga facility.

The announcement came as VW broke ground for planned construction of its electric-car production plant at Chattanooga, and the batter pack plant brings the total investment at the facility to $800 million. The entire Tennessee operation is a big one as it's been designated as the North American headquarters for all EV production going forward. VW will operate plants in Germany and China for other parts of the world. The expansion will also create 1,000 new jobs locally.

The body shop for EVs will grow by 564,000 square feet to accommodate production of the battery-powered cars and traditional models that feature an engine. Both will roll off the same assembly line. The battery pack plant, meanwhile, will add another 198,000 square feet to the Chattanooga facility.

The first electric car Chattanooga will build will be the production version of the ID Crozz concept, likely called the ID 4. The electric SUV will first be assembled in Germany and exported to the US as it's slated to launch next year. In 2022, when construction wraps up, the electric SUV will shift to North America for production.

We know the US lineup of EVs from the German automaker will also grow to include a reborn Microbus and a vehicle based on the upcoming ID Space Vizzion concept, an electric wagon of sorts. VW confirmed the latter will be sold in some form in North America. Other concepts that could become production EVs include the ID Vizzion sedan, ID Roomz crossover SUV and the ID Buggy.

In the meantime, VW will continue building the Passat sedan and Atlas SUV at the facility. The new Atlas Cross Sport has also begun production ahead of a launch next year.

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