Volkswagen is deciding where to locate a new factory in North America to build electric vehicles for the US, the German automaker's new head for the Americas has said.

Scott Keogh, newly appointed Volkswagen Group of America CEO, told Reuters a new plant was needed to build a VW brand vehicle yet to be revealed, priced between IS$30,000-$40,000, that is due in 2020.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

"We are 100% deep in the process of 'We will need an electric car plant in North America' and we're holding those conversations now," Keogh said at the Los Angeles motor show.

Volkswagen announced earlier this month it would spend almost EUR44bn ($50bn) on developing electric cars, autonomous driving and new mobility services by 2023 while exploring areas of cooperation with Ford.

To meet a production timeline for 2020, the new electric car will initially be sourced outside of the US, Keogh said, but would then be produced at the newly chosen site.

See Also:

Volkswagen's existing US plant in Chattanooga, Tennessee, where the Passat and Atlas are built, could be one option as there is enough room at that facility, but it will not necessarily be chosen, Keogh told Reuters.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

For Volkswagen, although it is behind Tesla, it is not necessarily too late to capture a U.S. market that presents a "massive opportunity", Keogh said.

"The market timing actually is quite perfect," he told Reuters. "You need to have this intersection of 'Can you get costs down enough that you can produce a car at that price point, make enough money, have the technology capabilities that this is a car that we would want to put in the marketplace, and have market acceptance?' "

"And when all these things intersect that's ideally when you want to throw the dart."