It’s likely that only Americans of a certain age remember the days when the Volkswagen Beetle was America’s best-selling imported car and the hottest ride to a Grateful Dead concert was a Volkswagen Microbus.
Volkswagen is trying to harness some of that nostalgia in its latest move to regain the status and sales it enjoyed in the United States during the era of the Beetle and Microbus in the 1960s. But this time, it hopes its high-end 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 involves reading about a new electric model that resembles the Microbus, the ID.Buzz, and relaunching the Scout brand with a line of electric pickup trucks and sport utility vehicles.
Last week, as giant earthmovers kicked up clouds of dust, Volkswagen executives and local officials gathered near Columbia, South Carolina, to break ground on the site of a factory that will build vehicles bearing the Scout badge 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 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 decline, compared to 4% currently.
“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 unique opportunity to grow.”
Electric vehicles have already shaken up industry rankings, emboldening 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 U.S. sales last year.
“Electric vehicles help our brand be seen as a technology leader,” said José Muñoz, Hyundai’s chief operating officer. They also attract a more educated and affluent customer base than is the case for 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 overall U.S. sales rankings, hinting at a future where a different group of companies will reign.
The five largest companies in the United States for all engine types are General Motors, Toyota, Ford Motor, Hyundai and Stellantis. In the electric car sector, Tesla is comfortably number one, followed by Hyundai, GM, Ford and Volkswagen. Toyota is a minor player in the electric car space.
“Just because you’ve been around for 120 years doesn’t mean you’ll have anything in this new market.,” said Steven Center, chief operating officer of Kia America.
Volvo Cars is another company hoping to take advantage of the changes brought about by electric vehicles. The Swedish automaker, majority-owned by China’s Geely Holding, reported a 26 percent increase in U.S. sales last year.
Much of this growth comes 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 begin selling a Chinese-made all-electric compact SUV, the EX30, which will start at $35,000. The company will also begin shipping the EX90, a seven-seat SUV made in South Carolina that will start at around $80,000.
Especially for luxury car buyers, Mr. Cottone said, “there is a lot of room for growth in the electric vehicle segment over the next few years.”
Volkswagen has tried unsuccessfully since the 1970s to become more present in the United States, and analysts are skeptical that this time will be different. “I’ve seen Volkswagen set these targets before,” said Michelle Krebs, executive analyst at Cox Automotive.
Established automakers will not be left behind. GM and Ford are also investing heavily in electric vehicles, while Toyota announced it will begin producing a large electric SUV in Kentucky next year.
Ms. Krebs pointed out that U.S. auto sales were growing slowly, making the fight for market share a zero-sum game. “There’s that little bit of growth that everyone is looking for,” she said.
Volkswagen’s last major offensive in the United States ended in scandal. In the early 2000s, the company tried to sell cars with “clean diesel” engines to Americans. He touted the fuel, which was used far more in European passenger cars than in American cars, as being more environmentally friendly than gasoline.
But the campaign failed in 2015 when U.S. regulators discovered Volkswagen had used software in vehicles to cheat on emissions tests. In reality, cars polluted as much as long-haul trucks.
The scandal had an advantage for Volkswagen. This 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 tricky modifications to gasoline models. In Europe, Volkswagen’s various electric brands have higher sales than Tesla, according to Schmidt Automotive Research.
The person responsible for doubling Volkswagen’s sales in the United States is Pablo Di Si, president of Volkswagen Group of America. Mr. Di Si, a native of Argentina, said he plans to use the same strategy he deployed when he oversaw the company’s operations in Brazil, where Volkswagen’s market share is increased from 9 to more than 16 percent.
“You look at the segments that you think will be successful in 10 years,” Mr. Di Si said in an interview. “What are your gaps in the product portfolio? And then you start adding products for those particular markets.
In the United States, he said, that will likely include gasoline and hybrid cars as well as fully electric vehicles. Volkswagen plans to import the ID.7, an electric sedan, and the ID.Buzz. Mr. Di Si hinted that there could also be a new electric vehicle referencing the Beetle design. The last version of this car sold in the United States was the Beetle 2019.
Volkswagen is building a $5 billion plant in Ontario to supply batteries to its plants in Chattanooga, Tennessee, and Puebla, Mexico, which together will produce at least 80 percent of the company’s cars sold in America North. This will help buyers of cars from its Volkswagen, Audi and other brands qualify for federal tax credits of up to $7,500 per car.
Scout will fill a major gap in Volkswagen’s portfolio: pickup trucks, among the most popular vehicles in the United States. By reviving the Scout, which was one of the first passenger vehicles capable of driving on rough dirt roads as well as city streets, Volkswagen hopes to attract buyers who typically buy off-road vehicles from American brands like Chevrolet, Ford and Jeep.
The South Carolina plant will emphasize the made-in-America vibe when the first Scouts go on sale in late 2026. Volkswagen inherited the Scout brand when the company’s truck subsidiary, Traton, acquired Navistar, a American company previously known as International Harvester, in 2021.
The new Scouts could borrow some parts used in other Volkswagen vehicles, company executives said, but the design will be distinct from existing vehicles like the Chattanooga-made ID.4 electric SUV. Scout plans to unveil prototypes this year.
A stronger presence in the United States is “a strategic necessity,” Scott Keogh, general manager of Volkswagen’s Scout Motors division in South Carolina, said last week.
Outside the United States, Volkswagen is a giant, with a 26 percent share of the European market and 15 percent in China. But the company is under intense pressure in China, where sales of electric vehicles have grown 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 an isolated footprint, where it is only strong in one region.”
