A Volkswagen logo is seen as it launches its ID.6 and ID.6 CROZZ SUV at a world premiere ahead of the Shanghai Auto Show, in Shanghai, China April 18, 2021.
A Volkswagen logo is seen as it launches its ID.6 and ID.6 CROZZ SUV at a world premiere ahead of the Shanghai Auto Show, in Shanghai, China April 18, 2021. Reuters / ALY SONG

Volkswagen AG plans to invest at least $7.1 billion over the next five years in North America and add 25 new electric vehicles there by 2030, including a recreation of VW's classic Microbus, a top executive said on Monday.

The latter model, called ID.Buzz, is a centerpiece of the plan. It will be imported initially from VW's Hanover plant in Germany, but ultimately could be assembled in the United States or Mexico, according to Scott Keogh, president and CEO of Volkswagen Group of America.

U.S. demand for the ID.Buzz is "through the roof," Keogh said at a media briefing on Monday. The upshot is that "there could be an opportunity" to build the vehicle in North America, he said.

VW's North American investment plan is part of a broader five-year global spending plan, announced in December, that earmarks $98 billion for "e-mobility, hybridization and digitalization," including construction of battery plants and partnerships with battery material suppliers.

The North American figure does not include a provision of $1.8 billion or more for additional local battery production to supplement battery cells that VW is buying from SK Innovation's Georgia plants, Keogh said. VW aims to establish dedicated cell production to support its ambitious electric vehicle rollout in the region, he said.

The German automaker expects at least 50% of its U.S. vehicle sales to be fully electric by 2030, Keogh said. That compares with a 70% target for electric vehicles in Europe by 2030.

VW will begin to phase out its gasoline-powered models in North America, with the aim of exiting sales of combustion-engine vehicles early in the next decade.

VW has begun pilot production of the ID.4 electric crossover at its Chattanooga plant in Tennessee, in preparation for a fall launch, and is upgrading its Mexican plants in Puebla and Silao to starting building electric vehicles, motors and related components by mid-decade.

Keogh said VW expects to add as many as four electric SUVs to its U.S. portfolio, starting in 2026, that would cover the same segments now served by gasoline-powered models, including Taos, Tiguan and Atlas.