{"id":27969,"date":"2021-09-18T15:13:58","date_gmt":"2021-09-18T19:13:58","guid":{"rendered":"https:\/\/henrypayne.com\/?p=27969"},"modified":"2021-09-18T15:13:58","modified_gmt":"2021-09-18T19:13:58","slug":"payne-vw-bets-the-chattanooga-farm-on-evs-with-the-id-4-suv","status":"publish","type":"post","link":"https:\/\/henrypayne.com\/index.php\/2021\/09\/payne-vw-bets-the-chattanooga-farm-on-evs-with-the-id-4-suv","title":{"rendered":"Payne: VW bets the (Chattanooga) farm on EVs with the ID.4 SUV"},"content":{"rendered":"

Chattanooga, Tenn.<\/em>\u00a0\u2014 General Motors and Ford aren\u2019t the only automakers in the United States betting the farm on EVs.<\/p>\n

Volkswagen has established its U.S. beachhead here in right-to-work Tennessee to build a new generation of electric vehicles starting with the ID.4 SUV. VW is investing\u00a0$41 billion in electrification over the next five years, with $4.3 billion targeted at the Chattanooga plant that will begin producing ID.4s next year for North America.<\/p>\n

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EVs make up a sliver of U.S. sales, but the German automaker is all-in, hiring innovative\u00a0former Cadillac chief Johan de Nysschen to run the show from Chattanooga; building a battery assembly plant; and partnering with Korean battery supplier SKI, which has erected a multi-billion plant across the border in Georgia.<\/p>\n

\u201cWe\u2019ve got to make it work,\u201d said de Nysschen, the chief operating officer for Volkswagen of America, who built a reputation as a straight shooter in a career that spans Audi, Infiniti and Caddy. \u201cWe have burned the bridges behind us.\u201d<\/p>\n

VW\u2019s ID.4 and smaller ID.3 already make up 15% of VW\u2019s German sales with heavy government subsidies. VW, like the Detroit automakers, says U.S. taxpayer support is key as it ramps up sales of the ID.4 (the ID.3 is too small for America) as well as a future ID Buzz van and an as-yet-unnamed sedan.<\/p>\n

The Detroit News tested an all-wheel-drive, $50,870 version of the ID.4 across southern Tennessee. With its 77\u00a0kWh of batteries stored under the cabin, the nimble EV recalled Tesla\u2019s hot-selling Model Y SUV with\u00a0keyless startup and liquid-smooth acceleration. At the Chattanooga Aquarium, ID.4 turned the heads of a young couple.<\/em><\/p>\n

\u201cIs that a new electric car?\u201d said one. Automakers think a Millennial generation\u00a0raised on plug-in smartphones will flock to plug-in cars.<\/em><\/p>\n

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Unlike the Detroit automakers, however, VW is not targeting Tesla with the compact-sized ID.4 \u2014 but segment volume sales leaders like the gas-powered Toyota RAV4 and Honda CR-V.<\/p>\n

\u201cToyota and Honda don\u2019t have anything like this,\u201d said Scott Keogh, de Nysschen\u2019s boss who runs VW North America from Herndon, Va.<\/p>\n

Keogh expects a $7,500 to 10,000 tax rebate from Congress this year for each EV buyer. Significantly, he expects the rebate will be at the point of sale with no volume cap \u2014 a departure from the past, when Congress handed out $7,500 tax credits that could only be realized against an individual\u2019s tax liability. The tax credit was capped at 200,000 sales \u2014 a number Tesla and GM long ago eclipsed \u2014 but would now be limitless.<\/p>\n

Subtract $10,000 from the $50k ID.4 tester and its $40,000 price tag is close to that of a loaded RAV4 Hybrid.<\/p>\n

Previous government attempts to encourage U.S. alternative fuels \u2014 diesel, ethanol, electric \u2014 have struggled. Auto executives are mindful that only Tesla (which accounts for 2 in 3 EV sales in the U.S.) has gotten any traction, even without a tax credit. But Keogh is confident the subsidized ID.4 will be a volume seller.<\/p>\n

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The News got a tour of the sprawling Chattanooga plant where ID.4 will be built alongside the hulking, gas-powered, three-row Atlas SUV and Atlas Cross Sport. Keogh acknowledges the\u00a0paradox\u00a0but says VW must meet market demands today to pay for the transition to VW\u2019s EV plans of tomorrow. It\u2019s a similar\u00a0business model to that of Detroit automakers with pickup trucks\/EVs.<\/em><\/p>\n