It’s great news for Columbia, the capital of the US state of South Carolina: The Volkswagen Group is building a new factory for electric cars near the city of 140,000. According to the company, around 4,000 jobs are to be created in the plant, and the project will cost the Wolfsburg-based company two billion dollars (1.9 billion euros). Construction is scheduled to begin this summer and production will start at the end of 2026.
“We have a unique opportunity to grow profitably and electrically in the USA. We want to use it,” commented VW CFO Arno Antlitz on the location decision on LinkedIn. The supervisory board in Wolfsburg had previously given the green light for the project.
The decision comes at a time when many companies from Germany want to increase their investments in the USA because the government there is massively subsidizing climate-friendly technologies. Volkswagen is also considering building a battery cell factory in North America. Canada, which is linked to the USA by a common trade zone, is under discussion. There, the group had recently secured access to important battery raw materials through agreements.
VW had already planned the investment in the USA before President Joe Biden’s government launched the Inflation Reduction Act (IRA). But VW now also expects support from the multi-billion dollar subsidy program. “This gives us even more support in our strategy of localizing production,” said CFO Arno Antlitz on Friday at a conference call with journalists.
Originally, there was talk of a possible cooperation with a contract manufacturer, such as Foxconn. However, the employee representatives in Wolfsburg had spoken out in favor of running the planned production themselves.
VW has not yet been able to quantify how high the subsidies are in total. What is certain is that the state of South Carolina is strongly supporting the settlement. Possible funds from the IRA are added to this. Now Columbia will line up with Chattanooga, Tennessee, Spartanburg, South Carolina, and Tuscaloosa, Alabama. The US plants of VW, BMW and Mercedes-Benz are located in these cities.
The group operates the new VW factory in addition to the Chattanooga plant, where, among other things, the electric car ID.4 is built. Columbia becomes the headquarters of a new brand for Volkswagen: Scout. Under this name, the International Harvester group had built beefy off-road vehicles in the USA from 1960 to 1980 and sold them with some success. After the end of the old Scout, the brand rights were last owned by the commercial vehicle manufacturer Navistar, which Volkswagen in turn bought in 2020.
Now, from 2026, two new Scout models are to come onto the US market: a pickup and a large SUV, both as purely electric cars. After many failures in the USA, this is a daring move by VW, because the group is penetrating the most important segment of the market. This field is dominated by Ford, General Motors and the RAM brand, which belongs to the Stellantis group. In addition, the young e-car manufacturers Tesla and Rivian are pushing into the pickup market.
In Wolfsburg they are aware of the risks, but at the same time appreciate the potential. The new factory should be able to build more than 200,000 Scouts per year in the future. Last year, the group sold 842,600 cars in the market with all brands combined. “The shift in the North American market towards electric mobility is a historic opportunity for the Group to take a stronger position, further diversify our global footprint and increase our resilience,” Antlitz wrote.
With Scout, one tries to orientate oneself to the young competitors in organizational terms. The new brand is not integrated into the old structures, but is being created as a kind of start-up that is rather loosely connected to the group. It is managed by Scott Keogh, the previous head of VW in the USA. The group’s chief strategist, Gernot Döllner, sits on the supervisory board. Brand boss Keogh said at the start in Columbia that he wanted to revive an “American icon” and was quoted as saying: “We’re bringing the Scout spirit to South Carolina and it’s going to be one hell of a ride.” Check it out , Scout says whether external investors can also participate in this trip in the future.
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