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Volkswagen (VWAGY) to Expand Chattanooga Plant, Develop EVs

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Volkswagen AG (VWAGY - Free Report) intends to expand its Chattanooga assembly plant for manufacturing electric vehicles (EVs), including the ID.4 crossover. The plant will now have a new voltage laboratory for the manufacturing and testing of EV cells and battery packs for future US-built versions. The lab is expected to begin construction shortly in order to be fully operational by spring 2021.

This facility will feature will feature state-of-the-art devices, including pressure testers, explosion-rated climate chambers and a custom multi-axis shaker table (MAST), to test the durability of automotive parts in specific battery systems.

Meanwhile, Volkswagen is in talks to team up with EV start-up Fisker, in a bid to enable the usage of the modular electric-drive matrix (MEB) platform of the former for the latter’s upcoming SUVs.

It also reached an outline agreement with Ford (F - Free Report) recently to enhance the ownership experiences for the current and future customers in Europe and other regions. The agreement is likely to strengthen the existing partnership between these two major auto giants to produce mid-size pick-up trucks, and commercial and EVs. Both companies aim to manufacture a highly-differentiated Ford electric vehicle built on Volkswagen's MEB platform for Europe, boosting the zero-emission capabilities of the former by the end of 2020.

Zacks Rank & Stocks to Consider

Volkswagen currently carries a Zacks Rank #3 (Hold). Shares of the company have depreciated 8%, year to date, compared with the industry’s decline of 6.6%.

Some better-ranked stocks in the auto sector include AutoNation, Inc. (AN - Free Report) and LCI Industries (LCII - Free Report) , both sporting a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of AutoNation have appreciated 17.3%, year to date, compared with the industry’s rally of 16.1%.

Shares of LCI Industries have been up 18.5%, year to date, as against the industry’s decline of 0.1%.

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