Probably only Americans of a certain age remember when the Volkswagen Beetle was the best-selling imported car in the United States and the hippest ride to a Grateful Dead concert was a Volkswagen Microbus.
Volkswagen is trying to capitalize on some of that nostalgia in its latest push to recapture the position and sales it enjoyed in the United States during the heyday of the Beetle and Microbus in the 1960s. But this time it hopes the flagship its models will be electric.
The German automaker is second only to Toyota globally, but is a niche player in the United States. Part of its plan to revive its fortunes here is to build on a new Microbus-like electric model, the ID.Buzz, and revive the Scout brand with a range of electric pickups and sport utility vehicles.
Last week, as giant earth movers kicked up clouds of dust, Volkswagen executives and local officials gathered near Columbia, SC, to break ground on the site of a factory that will build Scout-badged vehicles for the first time since 1980.
Volkswagen is one of several foreign automakers that see electric cars and the disruption they are causing as a way to challenge the dominant players in the United States. Volkswagen, which also owns Audi, Porsche, Bentley and Lamborghini, aims to at least double its market share in the United States by the end of the decade from a paltry 4 percent now.
“This market is going electric and everyone is starting from scratch,” Arno Antlitz, Volkswagen’s chief financial officer, said in an interview. “This is our only chance to grow.”
Electric vehicles have already shaken up the industry rankings, boosting Volkswagen and other foreign automakers. Battery-powered SUVs and sedans helped Hyundai Motor and its sister brand Kia overtake Stellantis, the maker of Jeep, Dodge, Chrysler and Ram, as the fourth-largest automaker by sales in the United States last year.
“Electric vehicles help our brand to be seen as a technology leader,” said José Muñoz, CEO of Hyundai. They also attract a better-educated, more affluent customer than was the case with the South Korean company’s gasoline-powered vehicles, he said in an interview.
The list of companies dominating electric car sales looks very different from the top rankings for overall US sales, hinting at a future when a different group of companies will rule.
The top five companies in the United States for all engine types are General Motors, Toyota, Ford Motor, Hyundai and Stellantis. In electric cars, Tesla is No. 1 by a wide margin, followed by Hyundai, GM, Ford and Volkswagen. Toyota is a minor player in electric cars.
“Just because you’ve been around for 120 years doesn’t mean you’re going to have anything in this new market», said Steven Sender, Kia America’s chief operating officer.
Volvo Cars is another company hoping to benefit from the changes brought about by electric vehicles. The Swedish automaker, which is majority-owned by Geely Holding Group of China, reported a 26 percent increase in U.S. sales last year.
Much of this growth has come from hybrids that have a gasoline engine and can travel shorter distances on batteries. But Mike Cottone, Volvo Car’s president for the United States and Canada, said he sees hybrids as a path to fully electric vehicles.
Later this year, Volvo will start selling a Chinese-made, all-electric compact SUV, the EX30, which will start at $35,000. The company will also begin delivering the EX90, a seven-seat SUV built in South Carolina that will start at around $80,000.
For luxury car buyers in particular, Mr. Cottone said, “there’s a lot of room for growth in the EV segment over the next few years.”
Volkswagen has tried and failed since the 1970s to become a bigger presence in the United States, and analysts are skeptical that this time will be different. “I’ve seen Volkswagen set these goals in the past,” said Michelle Krebs, executive analyst at Cox Automotive.
Established automakers won’t be pushy. GM and Ford are also investing heavily in electric vehicles, while Toyota has said it will begin production of a large electric SUV in Kentucky next year.
Ms. Krebs pointed out that U.S. auto sales were growing slowly, making the battle for market share largely a zero-sum game. “There’s that little bit of growth that everybody’s looking for,” he said.
Volkswagen’s last big push into the United States ended in scandal. In the early 2000s, the company tried to sell Americans on cars with “clean diesel engines.” It advertised the fuel, which was used in European passenger cars far more than American ones, as more environmentally friendly than gasoline.
But the campaign collapsed in 2015 when US regulators discovered that Volkswagen had used software in the vehicles to cheat emissions tests. In fact, cars were polluting as much as long-haul trucks.
The scandal had a boon for Volkswagen. That prompted the company to invest early in electric vehicle technology and build cars designed from the ground up to run on batteries, rather than making awkward modifications to gasoline models. In Europe, Volkswagen’s various electric brands combined outsell Tesla, according to Schmidt Automotive Research.
Responsible for doubling Volkswagen’s sales in the United States is Pablo Di Si, president of the Volkswagen Group of America. Mr. Di Si, originally from Argentina, said he planned to use the same strategy he used while overseeing the company’s operations in Brazil, where Volkswagen’s market share grew to more than 16 percent from 9 percent.
“You’re looking at the segments that you think will be successful 10 years from now,” Mr. Dee See said in an interview. “What are your product portfolio gaps? And then you start adding products for those specific markets.”
In the United States, he said, this is likely to include gasoline-powered cars and hybrids as well as pure electric vehicles. Volkswagen plans to introduce the ID.7, an electric sedan, and the ID.Buzz. Mr DC hinted that there could also be a new electric vehicle that references the Beetle’s design. The last version of this car sold in the United States was the 2019 Beetle.
Volkswagen is building a $5 billion plant in Ontario to supply batteries to its plants in Chattanooga, Tenn., and Puebla, Mexico, which together will make at least 80 percent of the company’s cars sold in North America. This will help car buyers from Volkswagen, Audi and other brands qualify for federal tax credits of up to $7,500 per car.
The Scout will fill a major gap in Volkswagen’s portfolio: pickups, among the most popular vehicles in the United States. By reviving the Scout, which was one of the first passenger vehicles that could navigate rough dirt roads as well as city streets, Volkswagen hopes to attract buyers who typically buy off-road vehicles from American brands such as Chevrolet, Ford and Jeep.
The South Carolina plant will underline the Made in America feel when the first Scouts go on sale in late 2026. Volkswagen inherited the Scout brand when the company’s truck subsidiary, Traton, acquired Navistar, an American company formerly known as International Harvester, in 2021.
The new Scouts may borrow some parts used in other Volkswagen vehicles, company officials said, but the design will differ from existing vehicles, such as the ID.4 electric SUV built in Chattanooga. Scout plans to unveil prototypes this year.
A stronger presence in the United States is “a strategic necessity,” Scott Keogh, the chief executive of Volkswagen’s Scout Motors division, said in South Carolina last week.
Outside the United States, Volkswagen is a behemoth, with a 26% share of the European market and 15% in China. But the company is under severe pressure in China, where sales of electric vehicles are growing rapidly, allowing BYD and other Chinese automakers to gain market share from foreign automakers. Volkswagen needs growth in the United States to compensate.
Volkswagen “wants to have a strong global footprint,” Mr. Keogh said, “not a single footprint where it’s only strong in one region.”
