VW Bringing More EVs to U.S.

Volkswagen so far has brought only one of its six new battery-electric vehicles to the North American market, but that’s about to change according to the brand’s CEO Thomas Schäfer. And the German automaker will expand the number of BEVs it produces in the U.S. as well.

Several iterations of the ID.4 SUV now are available in the States and will be followed later this year by the bigger ID.7 which made its debut – in partially camouflaged form – at CES 2023 in Las Vegas last week.

“With the new ID.7, we are extending our electric model range into the upper segments. The sedan will offer top-class technology and quality,” Thomas Schäfer, CEO of Volkswagen Passenger Cars says in a statement. “The ID.7 is one of 10 new electric models that we are planning to launch (globally) by 2026. Our goal? To deliver suitable products for our customers in every single segment.”

Following the CES 2023 introduction, Schäfer gives Wards further insight into VW’s plans for the U.S. market. The ID.7 will be the first of several new BEVs coming to the U.S., and will serve as the all-electric replacement for the Passat sedan. It will reach American showrooms next year, following the launch of an extended-wheelbase version of the ID.Buzz microbus (below).

IDBuzzl.jpg

Until recently, the automaker expected to offer relatively few BEVs in the U.S. due to the relatively slow consumer acceptance of the technology. But that strategy is being revised, Schäfer says.

“The U.S. has actually gone over the tipping point, and what we see in the forecasts and also (in) consumer preference is that electric mobility has really become mainstream,” Schäfer says. “There's no turning back and, you know, we have a great opportunity to make a more significant stance on the American market (with BEVs), rather than with internal-combustion engines.”

Plans call for the VW brand to have four of its 10 BEVs on sale in the U.S. by mid-decade, with still more to follow by 2030. But that number could grow, Schäfer adds, noting the automaker will hold a major strategy session in February to rethink its plans. It could see significant changes in the strategy laid out by former VW Group CEO Herbert Diess – a big BEV advocate – before he was forced out last year.

What’s clear, says Schäfer, is that the number of BEVs in the VW lineup are certain to grow beyond prior plans and will account for as much as 80% of the brand’s portfolio by decade’s end.

“Exact numbers are hard to say because we are trying to focus the model lineup and not have as many variants as in the past,” he explains.

Even before Diess departed, VW was rethinking its BEV strategy. For one thing, it pushed back by two years the rollout of the new SSP architecture. That’s a flexible, skateboard-like platform that will underpin most new VW BEVs by 2030.

The original plan was to replace the current MEB platform by mid-decade. Instead, a modified version, the MEB+, will live on until at least 2028. But it will bring a number of upgrades, including longer range and faster charging times, Schäfer says.

Increasing consumer acceptance is just one of the reasons why VW wants to expand its BEV lineup in the U.S. There’s also the tough new zero-emission vehicle target laid out by the Biden Admin. calling for ZEVs to account for as much as 50% of U.S. sales by 2030, Schäfer notes.

Political pressure also will lead to the production of more VW BEVs in the U.S., he adds. Under the Inflation Reduction Act passed last year, a revised incentive program requires BEVs be built in the U.S. in order to qualify for up to $7,500 in tax incentives.

VW recently began producing a version of the ID.4 (below) at its assembly plant in Chattanooga, TN. That followed a nearly $1 billion upgrade that will allow a second BEV to be produced alongside the SUV.

VW ID4png

It’s “too early to say” which model will come next, but Schäfer says an announcement “probably” will follow “by the middle of this year. Currently, we’re going through the cycle plan through 2032 and it’s all being revised.

 “We’re trying to get all models focused on the U.S., like the ID.4, industrialized (built) in the U.S,” he adds. While it’s still too early to say how, when or where that will happen, Schäfer says it could require VW to set up an additional U.S. plant, though there are other options as well.

“The question is what does the group do (including brands like Audi and Porsche),” he explains. “There could be synergies to use one of their factories. But it’s clear the future for us is electric in the U.S. (Chattanooga) was a great first step, and more to follow. We always manufacture where we sell. Chattanooga cannot be the only (U.S. plant).”

VW also expects to set up at least one new battery-cell plant North America, Schäfer says, noting that plans for that facility also are expected to be finalized in February.