German automaker Volkswagen Group is looking to more than double its current share of the US market by prioritizing EV production in North America. By adhering to new terms laid out in the Biden Administration’s Inflation Reduction Act, Volkswagen intends to deliver at least 25 all-electric models over the next seven years that will qualify for the entire $7,500 federal tax credit.
Volkswagen Group may not be leading the all-electric charge in terms of technology, especially software, but the legacy automaker is still making moves almost daily to pivot toward varietal BEV production in order to deliver vehicles that are affordable and enticing to consumers. Despite other European automakers (including Porsche) splitting hairs over the nonexistent demand for e-fuels, Volkswagen Group continues to embrace an all-electric future, with the goal of gaining a larger share of the global market.
A huge chunk of that market lies in North America, where the automaker currently has a production footprint that is home to its ID.4 EV. That factory will soon be joined by a new US-based battery plant to support local EV production and help Volkswagen’s future models qualify for federal tax credits now that the US Department of Treasury has shared its battery guidance criteria.
Additionally, Volkswagen Group recently announced South Carolina as the new home of its next production facility, where its Scout sub-brand EVs will be built. Fellow marque Audi could soon join the assembly lines at one of those US factories as well, providing further evidence of North America sitting dead center on the Group’s office dartboard.
Volkswagen Group currently has a grip over roughly 4% of the US market today, but it looks to boost that number to 10% by the end of the decade. In order to do so, Volkswagen America’s CEO shared the company’s plans for broader availability stateside, utilizing federal tax credit opportunities as its catalyst.
Volkswagen goes all in on US production, federal tax credit
Volkswagen may be putting the pieces in place to gather a larger share of the US market, but it remains a tall task – one that the legacy automaker has taken on in the past with little success. The Volkswagen passenger car brand currently holds a meager 1.8% of the US market today but hopes to reach 5% by 2030.
The overall Group hopes to achieve the aforementioned target of 10% in the same period with the help of some of its more popular, premium marques, like Audi and Porsche. Volkswagen has a head start on some of its competitors with established EV production in the US already but will need to expand its assembly lines to models beyond its namesake brand in order to have a chance.
Top comment by Chris
I’m American and I own a Golf but in my experience my fellow Americans buy vehicles by the pound. They won’t pay a decent amount for a smaller car and they don’t really care about things like ride/handling balance , fit and finish, quality of materials etc… not all but a lot would rather have something bigger with a fisher price interior. Of course some need a bigger vehicle but a lot just think of smaller cars as for poor people. Hence VW’s shift to larger SUVs lately. What can you do?
Those plans already include a $7 billion investment in US production, which will help Volkswagen begin production of its ID.Buzz electric van in 2024. This year alone, Volkswagen has already introduced plans for several more affordable EV models to the public but has not declared which, if any, will be assembled in the US.
It appears that plenty more are coming stateside, however. According to Volkswagen Group of America CEO Paulo Di Si, the automaker plans to sell 25 BEV models in the US by 2030 – all of which should qualify for the Inflation Reduction Act’s full $7,500 federal tax credit. That means their assembly and battery components must operate in North America or through a US free trade partner. Per Di Si in a recent Bloomberg Television interview:
We have a great opportunity in the US. I believe this is the right time and the right place.
To avoid similar follies from past attempts at US market saturation, Volkswagen Group is hiring designers and engineers to cater its future EVs specifically toward US consumers. As a result of emissions scandals and software issues, Volkswagen’s popularity has dwindled in the US, although the ID.4 has gained a strong following, and its upcoming ID electric van continues to generate… buzz.
Even Di Si admits the automaker’s US market targets are going to be tough to hit, but the CEO remains confident in the Group’s US plans.
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