Volkswagen now has another electric SUV to take on Tesla

Production has started in Germany on the first electric SUV from the Volkswagen brand, marking the latest push by the world’s largest carmaker into cleaner vehicles.

Volkswagen announced Thursday that production of the ID.4 compact SUV has commenced at its plant in Zwickau, which has been converted at a cost of €1.2 billion (1.4 billion) to manufacture 300,000 electric vehicles a year.

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The ID.4 could help Volkswagen compete with Tesla (TSLA), which already offers an electric SUV called the Model Y. Audi, Volkswagen’s luxury brand, has been producing an electric SUV called the e-tron at a factory in Brussels, Belgium, since late 2018.

Ralf Brandst?tter, head of the Volkswagen brand, said in a statement that the ID.4 allows the carmaker to offer an electric vehicle in “the world’s largest growth segment.” He said the SUV will initially be built and sold in Europe and China, with US production slated to begin in 2022 in Chattanooga, Tennessee.

According to Volkswagen (VLKAF), the SUV will have a range of up to 500 kilometres (311 miles). It will make its world premier in September.

The German group, which also owns Porsche, Bugatti, Skoda, Lamborghini and SEAT, plans to spend €33 billion ($39 billion) on electric mobility by 2024. It hopes to produce 1.5 million electric cars in 2025.

An image of the ID.4 compact SUV provided by Volkswagen.

The ID.4 is the second vehicle built on the company’s new modular electric car production platform, or MEB. The first, a small car called the ID.3, is also being produced at the plant in Zwickau.

“We are right on schedule with the Volkswagen brand’s transformation process to e-mobility. The ID.3 is now being followed by the ID.4,” said Thomas Ulbrich, the executive who oversees e-mobility at Volkswagen.

German Chancellor Angela Merkel reflects in the window of a Mercedes Vision EQS car at the booth of Daimler as she tours the fair grounds after officially opening the International Auto Show (IAA) in Frankfurt am Main, western Germany, on September 12, 2019. - Frankfurt's biennial International Auto Show (IAA) opens its doors to the public, but major foreign carmakers are staying away while climate demonstrators march outside -- forming a microcosm of the under-pressure industry's woes. (Photo by Tobias SCHWARZ / AFP) (Photo credit should read TOBIAS SCHWARZ/AFP via Getty Images)

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Auto factories around the world were forced to shut earlier this year as the coronavirus pandemic gathered pace. Volkswagen reopened its sprawling Wolfsburg plant in April and brought others back into production over the following months.

“Given the major societal challenges of recent months, the successful start of ID.4 series production is an exceptional achievement,” said Ulbrich.