Volkswagen to invest $482 million to make electric compact car at Wolfsburg

FILE PHOTO: The logo of German carmaker Volkswagen is seen on a rim cap in a showroom of a Volkswagen car dealer in Brussels, Belgium July 9, 2020. REUTERS/Francois Lenoir/File Photo

BERLIN (Reuters) - Volkswagen will invest 460 million euros ($482 million) by early 2025 in its Wolfsburg plant, with most of the funds to be spent for the production of the electric ID.3 model, brand chief Thomas Schaefer said on Wednesday.

After full production of the compact car gets underway, which is expected by 2025, an additional fully-electric model in the SUV segment will be produced in Wolfsburg on the MEB platform, an electric-only platform used since 2019.

The electric drive kit, which incorporates structure and design of a vehicle, is now being adapted into a new version, which will be called MEB+ and would allow for faster charging times and longer ranges, the automaker said.

Retooling production locations in Wolfsburg, which employ around 60,000 workers producing models including Golf, Tiguan and Touran, to make electric vehicles has been top on the agenda for the workers council amid fears the plant could lose relevance in the shift to electric mobility.

Output from the flagship plant has been on a downward spiral since 2015 when it produced around 800,000 vehicles, dropping drastically since the start of the coronavirus pandemic to under 400,000 a year.

Schaefer said on Tuesday the carmaker was still facing "flat-out chaos" on the supply side as suppliers cancel major orders on one night's notice.

The carmaker will decide by February whether to produce a new Trinity electric sedan at the main Wolfsburg plant or build a new factory for the model close by.

The new SUV model would build on the carmaker's existing electric fleet, Schaefer said on Wednesday.

"This is the largest vehicle segment worldwide, in which our beloved Tiguan also belongs. The new model will add to our bestseller ID.4 and ID.5 models and expand our market position," he said.

The timeline for production of the ID.3 is on track, with partial production from 2023 and full production expected in 2024.

($1 = 0.9535 euros)

(Reporting by Victoria Waldersee; Editing by Christoph Steitz, Miranda Murray and Arun Koyyur)

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