Scott Keogh wants an electric pickup

Chattanooga The robots are already being prepared for their use in the large white factory hall at the foot of the Smokey Mountains. Giant yellow octopus arms swing through the air and screw invisible cars together, only a few hundred meters away from the almost finished new battery factory. From the middle of next year, the electric SUVs of the ID.4 model will roll off the assembly line here in the south of the USA, where Volkswagen is already producing the Atlas and the Passat. In a simple version and as an all-wheel drive.

The timing of the announcement was chosen deliberately: Exactly six years ago, the US authorities uncovered the diesel scandal that cost VW its good reputation and billions in fines. While the diesel scandal fraud process is beginning in Germany these days, VW is trying to position itself as a driver of electromobility in the USA.

To get the Americans excited about the new “All Wheel Drive”, VW invited trade journalists and car experts to Chattanooga this week. With a 180-mile jaunt down the country roads in the Smokey Mountains, the Germans want to show what their electric SUV can do: around 400 kilometers without charging, powerful acceleration and plenty of space, just as the Americans love it. The judges from JD Power will be there as well as the legendary racing driver and Dakar Rally winner Sue Mead.

The ID.4 is the first fully electric car that VW is launching in the US. The imported original version of the Stromer has been available from dealers here since March and will soon also be available with all-wheel drive. Volkswagen has invested 800 million dollars in the two factories for batteries and for the ID.4, which is currently only being built in Saxony. With production in Tennessee, Volkswagen Tesla is attacking its home market. Conversely, Tesla is building a factory in Brandenburg that will also produce an electric SUV with the Model Y at the end of the year.

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For VW, the ID.4 should only be the start of the electric offensive. US CEO Scott Keogh is toying with an electric flatbed truck, a vehicle that is particularly popular with Americans. “I think an electric pickup would be a fantastic idea! But there is nothing that we can confirm at this point in time, ”Keogh told Handelsblatt.

“Now would be a perfect time for an electric pick-up”

Pick-ups are good business for US auto companies. “They make up 40 percent of the profits,” he says. And that although their market share is only one fifth. “Now would be a perfect time for an electric pick-up because everything is changing,” says Keogh.

But Volkswagen is initially concentrating on SUVs – whether electric or petrol. Thanks to the new range of products, business is currently doing very well in the USA. For the first time in a long time, VW will also be making profits in the US market. “We’ll be profitable this year. That is 100 percent certain, ”says Keogh.

The main reason for the good business is the new product range with SUVs such as the Atlas, the Tao and the Tiguan, says Keogh. In fact, SUVs now make up 71 percent of the cars sold at Volkswagen in the United States. There is also great interest in the new all-wheel drive ID.4: According to Volkswagen, there are already 10,000 orders in the USA.

That would be a success, because Volkswagen has not always met the taste of its customers in the past. While the Beetle and the Bulli could still inspire the Americans into the 1970s, production of the Golf in the USA was a flop and VW had to close the factory.

VW as a pick-up

So far, the VW Atlas Tanoak is only a concept car – but US boss Keogh is already dreaming of an electric pick-up.

It wasn’t until 2011 that the company came back with the new plant in Chattanooga, but again with the wrong approach. Instead of the popular SUVs, the Wolfsburg-based company built the staid Passat and relied on diesel as the drive. But it did not meet the emissions regulations in the USA. Instead of admitting the mistake, the engineers opted for the fraudulent software – and thus steered the VW Group into the greatest crisis in the company’s history.

So has VW left the bad image from the diesel scandal behind? “Americans forgive mistakes,” observes Bernd Schmitt, Marketing Professor at the renowned Columbia Business School.

“People don’t necessarily forget the scandal. But they focus on other things such as the price, ”says Schmitt. And as far as the price-performance ratio is concerned, VW can offer a lot. He would advise the management to speak as little as possible about the scandal and to rely on good, original advertising or even names in order to arouse emotions like the VW bus or the Beetle. “They have so much history to refer to. They should use that, ”says the professor.

That looks similar to Keogh. For Volkswagen’s comeback story to be a real success, it takes more than just good compliance and decent numbers. “The trick of a brand is to be loved,” explains Keogh. “We have to bring back the magic of the Beetle,” he says, referring to the VW Beetle, which still enjoys cult status in the USA.

A duopoly of Tesla and Volkswagen

Evercore analyst Chris McNally sees good opportunities for Volkswagen in principle: “The electric car market of the future will be shaped by a duopoly between Tesla and Volkswagen,” McNally is convinced. Thanks to its new factories in Germany and Texas, Tesla is expected to produce two to three million electric cars by the middle of this decade. Volkswagen could well exceed this number at the same time.

VW plant in Chattanooga

The Atlas and Passat are currently rolling off the assembly line at the US plant.

The biggest difference between Tesla and VW is that Tesla produces the coveted e-cars on its own, while Volkswagen, as a European company, is forced to do so by CO2 regulations if it does not want to pay horrific fines, explains McNally. The analyst therefore expects Volkswagen to become an important e-car player in the USA as well.

The US manufacturers have recently announced ambitious electric targets. “But GM, Ford and Chrysler do not have the same regulatory pressure as VW because there are no strict CO2 regulations or penalties in the US,” explains the analyst. That is why Volkswagen will also play an important role more quickly in the USA.

In principle, the Wolfsburg-based company not only benefits from the “Electrify America” charging network in their e-car strategy, which they had to set up as an independent company as a punishment for the diesel scandal. You can also benefit from the new wind in Washington. After all, Joe Biden’s government is heavily relying on e-mobility.

Only the latest proposal by the Democrats worries VW: It provides for an additional premium of $ 5,000 for electric cars built by unionized companies in the United States. That would only benefit the big three manufacturers in Detroit – GM, Ford and Chrysler parent Stellantis – and exclude all foreign manufacturers. The foreigners, like VW, have settled in the south, where they don’t have to deal with the powerful UAW auto union.

“We need incentives to get the e-car market rolling. But different bonuses are wrong and unfair to the workers in Chattanooga ”, criticizes the US boss Keogh.

When asked when VW wants to beat Tesla on the US market for e-cars, Keogh makes a soothing gesture: “One step at a time,” he says.

More: The raw material problem of the electric car – and what VW, BMW and Daimler want to do about it

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