VW builds Europe’s biggest electric-car plant to halt Tesla’s march


Volkswagen Group will invest 1.2 billion euros ($1.4 billion) to revamp a plant in eastern Germany into Europe’s largest electric-car factory, giving chase to Tesla’s move into affordable zero-emission vehicles.

“We will lead e-mobility out of the niche and make the e-car accessible for millions of people,” Thomas Ulbrich, the VW brand’s head of electric-cars, told reporters in Zwickau Thursday. Electric-vehicle output will get underway in a about a year’s time, he said, with both cars and battery cells made using renewable energy.

The Zwickau site will manufacture up to 330,000 electric vehicles per year.

The move is part of a plan to produce some 50 battery-powered models across VW’s 12 auto brands by 2025. A smooth changeover from making thousands of combustion-engine vehicles every day will be vital for VW to defend its global leadership among incumbent rivals, while fending off new alternatives to traditional car ownership.

VW has little time to lose. Tesla is taking strides in resolving manufacturing problems at its U.S. factory, and plans to start selling the mass-market Model 3 early next year in Europe. In the U.S., the Model 3 has become a best-seller, beating all but a handful of Toyota and Honda sedans during the third quarter.

Zwickau is set to start making six different electric models from three VW group brands including the I.D. battery-car range as of 2021:

  • Thehatchback is set to roll off assembly lines in November 2019 and hit European showrooms in the following year priced at around 23,000 euros.
  • The I.D. Crozz, a compact crossover, is planned for sale in Europe, China and the U.S.
  • One further I.D. variant not announced yet, as well as two Audi and one Seat brand models.
  • The I.D. Lounge, a more spacious SUV with a longer wheelbase than the Crozz to appeal to American and Chinese consumers, will follow by 2023 at a factory that has not yet been identified.

“We will build the e-car for millions, not just for millionaires,” Ulbrich said.

VW’s massive scale in production and development will help offset lower returns on the first generation of electric cars compared to combustion engine vehicles.