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Volkswagen Is Charging Chattanooga With Its EV Battery Production Plant

Volkswagen has a well-earned reputation for innovation in the automotive market, giving the world the gas-friendly Beetle (aka “Bug”) and Minibus (aka “Hippie Van”) while other mainstream carmakers were still cranking out sedans and station wagons. Now the iconic German automaker has its sights set on a big slice of the electric vehicle (EV) market – and it’ll need a lot of batteries to power those EVs around. Volkswagen’s solution? Putting its money behind an EV battery supplier that recently announced plans to go public through a special purpose acquisition company, or SPAC.

© 2020 Copyright Volkswagen US Media Site
Images from Volkswagen’s U.S. press release

The supplier, QuantumScape, is a Silicon Valley developer of solid-state batteries backed by Volkswagen and Microsoft co-founder Bill Gates. Last month QuantumScape entered into a definitive agreement to merge with SPAC Kensington Capital Acquisition Corp. to become a publicly-traded company with an estimated enterprise value of $3.3 billion. QuantumScape is expected to list on the New York Stock Exchange under the ticker symbol “QS”. 

The QuantumScape deal is big news in the automotive world for a simple reason: proceeds will give QuantumScape the financing it needs to mass-produce batteries for Volkswagen’s electric vehicles. Volkswagen, through its joint venture with QuantumScape, also gets production from a company with more than 200 patents and patent applications related to solid-state battery technology, along with a scalable manufacturing process to commercialize that technology.

Two years ago Volkswagen and QuantumScape announced the joint venture to mass-produce solid-state batteries. Industry experts consider these batteries the wave of the future because they charge quicker than lithium-ion batteries, and can travel more miles with the same size battery pack. But they’re also expensive to manufacture – a problem that should be alleviated by QuantumScape’s scalable production process. 

Volkswagen has made no secret of its ambition to grab a bigger slice of the EV market, with plans to build a variety of new electric cars. Its first EV slated for the U.S. is the 2022 Volkswagen ID.4, an all-electric SUV that’s expected to hit the market next year. In late September Volkswagen unveiled the vehicle, which will be produced at five factories on three continents.

Images from Volkswagen’s U.S. press release

In 2022, Volkswagen will also begin building the ID.4 compact crossover in Chattanooga, Tenn., where the company already assembles the Passat, Atlas, and Atlas Cross Sport. VW has invested $800 million to expand the Chattanooga facility into its North American center for electric vehicles. The company estimates that this will create 1,000 additional jobs. It is also building a new Engineering and Planning Center in Chattanooga to test its EV batteries and oversee future EV engineering.


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