Volkswagen Makes Good on Electric Vehicle Promise

What a difference a year — or four — makes. In the fall of 2015, Volkswagen suffered an enormous blow to its reputation when the U.S. Environmental Protection Agency accused the automaker of cheating on emission tests for its diesel cars. Fast forward to 2019, and the company has chosen the U.S. as one of its standard bearers for the global electric vehicle revolution.

Volkswagen and the electric vehicle revolution

Volkswagen’s new U.S. venture is part of a broader pivot to zero emission technology, under which Volkswagen anticipates selling 1 million electric vehicles globally by 2025.

Volkswagen set the wheels in motion last January, when it announced that Chattanooga, Tennessee would host one of the first two facilities globally to produce electric vehicles at scale using the company’s new modular “electric toolkit” chassis. The other facility is located in Germany and several more will go online within the next few years.

It seems that all has gone according to plan. Last week Volkswagen broke ground on the new $800 million U.S. facility on the grounds of its existing plant in Chattanooga. The plant will continue to turn out conventional cars and will add production of the new ID.CROZZ electric vehicle in 2022.

The Volkswagen Academy and the electric vehicle revolution

Aside from the carbon-cutting angle, the new Volkswagen facility is also interesting from a workforce development perspective.

The electric vehicle venture will involve an estimated 1,000 new jobs, but in a press release announcing the new facility Volkswagen hinted that the new Chattanooga facility will be part of the automation trend.

“The expansion signals the start of new, high-tech processes in the plant,” explained Tom du Plessis, President and CEO of Volkswagen USA.

The tradeoff is that many of the new jobs will involve advanced skills and, potentially, better pay. The list includes engineers specializing in electrical, software, mechanical, manufacturing, chemical and quality assurance fields in addition to supervisors and other specialists.

To help ensure a pool of qualified candidates, Volkswagen has teamed up with the Engineering and Information Technologies Division at Chattanooga State Community College to create the “Volkswagen Academy” program. In addition to classroom and lab instruction, the program provides for paid work experience at the Volkswagen plant.

Location, location, location

The new facility is also interesting as a choice of location. Like other states in the U.S. southeast, Tennessee has enacted “right to work” laws aimed at reducing labor costs and attracting manufacturers like Volkswagen, on top of other subsidies and tax incentives.

More specifically, though, Chattanooga is on the grid of the massive Tennessee Valley Authority, which is promoting the city’s electric vehicle initiatives as a model for the rest of the nation.

Dubbing Chattanooga the “Plugged In” city, TVA has provided funding for the city’s “revolutionary" electric vehicle car share program and its public charging station initiatives, too.

On a broader scale, TVA has also cited the new Volkswagen expansion in the context of decarbonizing the regional power grid. Earlier this year TVA approved the retirement of two more of its coal-fired power plants, even as the local economy added Volkswagen and other major employers.

Chattanooga is also home to the Department of Energy’s Oak Ridge National Laboratory. A major focus of the lab is EV charging and other advanced transportation R&D, and it has partnered with both Chattanooga and TVA on various electrification initiatives.

In sum, drivers in the Chattanooga region are already primed to accept electrification, perhaps more so than in other areas. That provides Volkswagen with an important hometown venue for promoting its new electric vehicles and testing its sales pitch.

The finishing touch

The common denominator in all this is the creation of partnerships that support the new facility, either directly in the case of the Volkswagen Academy or indirectly, though other resources and programs.

With that in mind, it’s worth noting that Volkswagen has also partnered with The Conservation Fund to on a major land conservation and outdoor recreation initiative.

The agreement, announced last week in tandem with the groundbreaking, calls for Volkswagen to donate $1.25 million to The Conservation Fund. The organization will use part of the donation to buy approximately 1,500 acres of land and turn it over to the U.S. Forest Service. The land will become part of the Cherokee National Forest, a major outdoor recreation destination as well as a nature preserve.

Another part of the donation will go to purchase three smaller, separate parcels located near the Chattanooga facility. Along with community recreation, those parcels with assist in efforts to conserve habitat for black bears (and bats, too).

The third part will consist of $200,000 earmarked for schools, nonprofits, and other local groups for projects aimed at water quality, environmental education, and recreation.

The link with outdoor recreation provides Volkswagen with another pathway for promoting the electric vehicles, at least to the extent that outdoor enthusiasts are particularly receptive to messages about the environment.

It will take a long time before global auto manufacturers shed their carbon-intensive past, but Volkswagen’s Chattanooga plant illustrates how companies can strategically locate new facilities to help accelerate the electric vehicle trend.

Image credit: Volkswagen