In all probability solely People of a sure age bear in mind when the Volkswagen Beetle was the best-selling imported automobile in the USA and the hippest journey to a Grateful Lifeless live performance was a Volkswagen Microbus.
Volkswagen is making an attempt to faucet a few of that nostalgia in its newest push to regain the standing and gross sales it loved in the USA through the Beetle’s and Microbus’s heydays within the Sixties. However this time it hopes its high fashions will probably be electrical.
The German carmaker is second solely to Toyota globally however is a distinct segment participant in the USA. A part of its plan to revive its fortunes right here is to lean on a brand new electrical mannequin that resembles the Microbus, the ID.Buzz, and to revive the Scout model with a line of electrical pickups and sport utility automobiles.
Final week, as large earth movers kicked up clouds of mud, Volkswagen executives and native officers gathered close to Columbia, S.C., to inaugurate the location of a manufacturing unit that can construct automobiles bearing the Scout badge for the primary time since 1980.
Volkswagen is one among a number of overseas automakers that see electrical automobiles and the upheaval they’re inflicting as a option to problem the dominant gamers in the USA. Volkswagen, which additionally owns Audi, Porsche, Bentley and Lamborghini, is aiming to at the very least double its market share in the USA by the tip of the last decade from a meager 4 p.c now.
“This market is popping electrical, and everyone’s ranging from scratch,” Arno Antlitz, the chief monetary officer of Volkswagen, stated in an interview. “That is our distinctive alternative to develop.”
Electrical automobiles have already shaken the business rankings, emboldening Volkswagen and different overseas automakers. Battery-powered S.U.V.s and sedans helped Hyundai Motor and its sister model Kia overtake Stellantis, the maker of Jeep, Dodge, Chrysler and Ram, because the fourth-largest carmaker by gross sales in the USA final yr.
“Electrical automobiles are serving to our model to be seen as a know-how chief,” stated José Muñoz, chief working officer of Hyundai. In addition they entice a better-educated, extra prosperous buyer than has been the case for the South Korean firm’s gasoline automobiles, he stated in an interview.
The record of firms that dominate electrical automobile gross sales seems to be lots completely different from the highest rankings for general U.S. gross sales, hinting at a future when a unique group of firms rule.
The highest 5 firms in the USA for all engine varieties are Common Motors, Toyota, Ford Motor, Hyundai and Stellantis. In electrical automobiles, Tesla is No. 1 by a large margin, adopted by Hyundai, G.M., Ford and Volkswagen. Toyota is a minor participant in electrical automobiles.
“Simply since you’ve been round for 120 years doesn’t imply you’re going to have something on this new market,” stated Steven Middle, the chief working officer of Kia America.
Volvo Automobiles is one other firm hoping to benefit from the adjustments wrought by electrical automobiles. The Swedish carmaker, which is majority owned by Geely Holding Group of China, reported a 26 p.c enhance in U.S. gross sales final yr.
A lot of that progress got here from hybrids which have a gasoline engine and may journey shorter distances on batteries. However Mike Cottone, president of Volvo Automotive for the USA and Canada, stated he noticed hybrids as a pathway to completely electrical automobiles.
Later this yr, Volvo will start promoting a Chinese language-made, all-electric compact S.U.V., the EX30, which can begin at $35,000. The corporate may also start delivering the EX90, a seven-seat S.U.V. that’s made in South Carolina and can begin round $80,000.
Particularly for luxurious automobile patrons, Mr. Cottone stated, “there’s quite a lot of room for progress within the E.V. section over the subsequent few years.”
Volkswagen has tried and failed because the Seventies to turn out to be a much bigger presence in the USA, and analysts are skeptical that this time will probably be completely different. “I’ve seen Volkswagen set these objectives earlier than,” stated Michelle Krebs, government analyst at Cox Automotive.
The established carmakers won’t be pushovers. G.M. and Ford are additionally investing closely in electrical automobiles, whereas Toyota has stated it would begin producing a big electrical S.U.V. in Kentucky subsequent yr.
Ms. Krebs identified that auto gross sales within the U.S. had been rising slowly, making the battle for market share largely a zero-sum sport. “There’s this little little bit of progress that everyone goes after,” she stated.
Volkswagen’s final massive push in the USA resulted in scandal. Within the early 2000s, the corporate tried to promote People on automobiles with “clear diesel” engines. It marketed the gasoline, which was utilized in European passenger automobiles rather more than in American automobiles, as extra environmentally pleasant than gasoline.
However the marketing campaign collapsed in 2015 when U.S. regulators found that Volkswagen had used software program within the automobiles to cheat on emissions assessments. In actuality, the automobiles polluted as a lot as long-haul vehicles.
The scandal had one profit for Volkswagen. It prompted the corporate to take a position early in electrical car know-how and construct automobiles that had been designed from the bottom as much as run on batteries, moderately than make awkward modifications to gasoline fashions. In Europe, Volkswagen’s varied electrical manufacturers collectively outsell Tesla, in accordance with Schmidt Automotive Analysis.
The individual accountable for doubling Volkswagen gross sales in the USA is Pablo Di Si, president of Volkswagen Group of America. Mr. Di Si, initially from Argentina, stated he deliberate to make use of the identical technique he deployed whereas overseeing the corporate’s operations in Brazil, the place Volkswagen’s market share rose to greater than 16 p.c from 9 p.c.
“You take a look at the segments that you just assume are going to achieve success 10 years from now,” Mr. Di Si stated in an interview. “What are your gaps within the product portfolio? And you then begin including merchandise for these explicit markets.”
In the USA, he stated, that’s prone to embody gasoline automobiles and hybrids in addition to all-electric automobiles. Volkswagen plans to import the ID.7, an electrical sedan, and the ID.Buzz. Mr. Di Si hinted that there may also be a brand new electrical car that references the design of the Beetle. The final model of that automobile bought in the USA was the 2019 Beetle.
Volkswagen is constructing a $5 billion manufacturing unit in Ontario to provide batteries to its factories in Chattanooga, Tenn., and Puebla, Mexico, which collectively will produce at the very least 80 p.c of the corporate’s automobiles bought in North America. That can assist patrons of automobiles from its Volkswagen, Audi and different manufacturers qualify for federal tax credit of as much as $7,500 per automobile.
Scout will fill a serious hole in Volkswagen’s portfolio: pickups, among the many hottest automobiles in the USA. By reviving Scout, which was one of many first passenger automobiles that might navigate tough grime tracks in addition to metropolis streets, Volkswagen hopes to draw patrons who usually purchase off-road-capable automobiles from U.S. manufacturers like Chevrolet, Ford and Jeep.
The South Carolina manufacturing unit will underscore the made-in-America vibe when the primary Scouts go on sale in late 2026. Volkswagen inherited the Scout model when the corporate’s truck subsidiary, Traton, acquired Navistar, a U.S. firm beforehand generally known as Worldwide Harvester, in 2021.
The brand new Scouts could borrow some components utilized in different Volkswagen automobiles, firm executives stated, however the design will probably be distinct from current automobiles like the electrical ID.4 S.U.V. made in Chattanooga. Scout plans to disclose prototypes this yr.
A stronger presence in the USA is “a strategic necessity,” Scott Keogh, the chief government of Volkswagen’s Scout Motors division, stated in South Carolina final week.
Exterior the USA, Volkswagen is a behemoth, with a 26 p.c share of the European market and 15 p.c in China. However the firm is underneath extreme strain in China, the place gross sales of electrical automobiles have been rising quick, permitting BYD and different Chinese language carmakers to realize market share from overseas automakers. Volkswagen wants progress in the USA to compensate.
Volkswagen “desires to have a powerful world footprint,” Mr. Keogh stated, “not have an remoted footprint, the place it’s solely sitting sturdy in a single area.”