Volkswagen plans to build EV factory worth two billion euros in Germany

Volkswagen has approved an investment worth two billion euros to establish a new electric vehicle plant in Germany. Volkswagen is putting effort to push its business in the region in order to create its foothold in the market and compete with EV maker Tesla. This factory will be built in Wolfsburg.

Construction of this plant will begin early next year and Volkswagen stated production will start from 2026. It will also manufacture the automaker’s new all-electric fleet. Head of Volkswagen brand Ralf Brandstaetter said this move is an important milestone for the company as it is planning to move away from internal combustion engines.

Volkswagen is investing 35 billion euros to completely change into an electric vehicle maker as it aims to become the world’s largest EV maker by 2025. Volkswagen is hoping to match Tesla with the new purpose-built factory by producing new electric vehicles in the space of 10 hours. The company's decision to make this factory came after Tesla got approval from local officials to start manufacturing in its gigafactory located near Berlin.

The company is also focusing to expand EV sales in China and is aiming to sell about one million EVs by 2023. Currently, the automaker's passenger car sales account for 60 per cent in the country and with emerging players in the segment, Volkswagen wants to become the major one. To achieve this goal, Brandstaetter relocated to Beijing where he will oversee the production of the company starting from August this year.

Volkswagen is also gearing up to launch its much-awaited electric vehicle ID.Buzz and its cargo variant ID.Buzz Cargo on March 9. This new EV is the electric version of Volkswagen's Microbus. It will come with an 82 kWh battery pack while the cargo version will come with 150 kWh battery pack.

(With inputs from AFP)