Volkswagen to make electric car cells and battery packs in the US

German automaker Volkswagen stated it was expanding its Chattanooga factory in Tennessee to make electric vehicle cells and battery packs in the United States, together with assembling electric vehicles.

The company said it prepares to break ground for a laboratory located in Chattanooga to develop and test cells and battery packs for its upcoming car models assembled in the US, with the goal of a wholly operational lab by spring 2021.

“A lot of auto companies will farm out the development and testing of batteries to another company, and some will actually do the work of developing and testing in-house. We are doing the latter,” said Wolfgang Maluche, vice president of engineering, Volkswagen America.

Volkswagen’s strategy to produce its own cells and battery packs for electric vehicles in the United States comes after an emissions scandal at the company, where the automaker admitted to using illegal software to evade pollution tests in the country.

The scandal has cost the automaker more than 30 billion euros ($35.51 billion) in fines, penalties, and vehicle buyback costs globally.

Insourcing electric vehicle cells and battery packs reinforces the automaker as one of the most ambitious traditional automakers in the electric vehicle domain, Credit Suisse analyst Dan Levy stated.

Last year, the automaker said it would invest $800 million to construct a new electric vehicle at its plant in Chattanooga.