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VW to Build Electric Cars in North America by 2020

The new head of Volkswagen AG’s U.S. unit confirmed the German auto maker plans to build electric vehicles in North America by 2020.

Hinrich Woebcken, speaking during an interview near the company’s factory in Tennessee, said Volkswagen’s plant in Chattanooga or a sprawling production facility in Mexico are among options being considered for the production of the new electric vehicles. He declined to give specific details on the search, but said multiple models will be built in North America.

Long committed to promoting diesel engine technology in a U.S. market where gasoline engines are preferred, Volkswagen has pivoted in the wake of a $15 billion settlement it agreed to pay to remedy a long running scheme in which many of its diesel cars used software to cheat on emissions tests. As part of a broad rebuilding project, executives have talked about a plan to become far more aggressive with electric vehicles than in the past.

Volkswagen currently sells an electric version of the small Golf, but it has limited appeal in the U.S. amid low gasoline prices and the high price of battery technology. General Motors Co., Tesla Motors Inc. and Nissan Motor Co. are among companies that offer or plan to offer dedicated electric vehicles in the U.S. at lower prices in the next 15 months.

Mr. Woebcken’s more immediate priority is working to compensate U.S. dealers who have had fewer vehicles to sell and have been combating a negative image since the diesel scandal emerged in September. He said those discussions are ongoing.

Named as head of Volkswagen’s North American division in January, he also needs to launch new products to freshen a portfolio that he characterized as being out of sync with U.S. tastes and lacking fresh offerings. He cited three new vehicles coming in future months: a longer wheelbase Tiguan crossover, a family-sized SUV aimed at competing with Ford Motor Co.’s Explorer, and an all-wheel drive wagon based on the small Golf.

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