German automaker Volkswagen said Monday its factory in Tennessee will be the focus of an $800 million investment in the company's manufacturing of electric vehicles in North America.
Volkswagen made a couple of announcements that it will expand its plant in Chattanooga and create 1,000 jobs there as the factory gears up for electric vehicle production beginning in 2022. The company issued a news release and disclosed the expansion at the North American International Auto Show in Detroit.
The factory in Tennessee's fourth largest city will produce a vehicle using a modular chassis the company has said will help build electric vehicles for the mass market. Volkswagen currently builds two vehicles in Chattanooga, the midsize Atlas SUV and the Passat sedan. The company announced in March a $340 million investment in Chattanooga to build the five-seat version of the Atlas, the Atlas Cross Sport.
Volkswagen said last week it posted an annual sales record in 2018. The company has paid more than more than $31 billion in fines and settlements after it was caught installing software that let cars cheat on U.S. emissions tests.
President Donald Trump and executives from VW and Germany's other biggest automakers discussed the companies' investments in the U.S. in December. Trump has been trying to pressure the German automakers into opening more factories in the U.S. and has threatened tariffs on imported vehicles.
Herbert Diess, CEO of Volkswagen AG, said the plant in Chattanooga "is a key part of our growth strategy in North America." The facility sits on 1,400 acres (560 hectares) and currently employs about 3,500 people.
"Together with our ongoing investments and this increase in local production, we are strengthening the foundation for sustainable growth of the Volkswagen brand in the U.S.," Diess said in a statement.
Tennessee Gov. Bill Haslam, whose term ends in days, said in a statement that VW's expansion in Chattanooga "underscores Tennessee's manufacturing strength and highly-skilled workforce."
Two other automakers, General Motors and Nissan, have large manufacturing plants in the state. More than 900 auto suppliers, including large ones such as Hankook Tire and Bridgestone Americas, operate in Tennessee, officials said.
Wolfsburg, Germany-based Volkswagen said it plans to commit almost $50 billion through 2023 toward the development and production of electric vehicles and digital services. The company is building its first dedicated electric vehicle production facility in Zwickau, Germany. It will also add electric vehicle production in the Chinese cities of Anting and Foshan in 2020 and in the German cities of Emden and Hanover by 2022.
