LOS ANGELES • Volkswagen is deciding where to locate a new factory in North America to build electric vehicles for the US market, the German carmaker's new head for the Americas said.

Mr Scott Keogh, the newly appointed chief executive officer of Volkswagen Group of America, said a new plant was needed to build a car yet to be revealed under the Volkswagen brand, priced at US$30,000 to US$40,000 (S$41,000 to S$55,000), that is due in 2020.

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

An electric car that could take on Silicon Valley's Tesla is part of the massive investment in electric vehicles that Europe's largest carmaker plans to make.

To meet a production timeline for 2020, the new electric car will initially be sourced outside of the United States, Mr Keogh said, but then will be produced at the new site. Volkswagen's existing US plant in Chattanooga, Tennessee could be an option as there is enough room at that facility, but it will not necessarily be chosen, he added.

Tesla has thus far captured the largest share of the US market for electric vehicles, but a host of new models will hit the market from German carmakers and others over the next two years. For Volkswagen, it is not necessarily too late to capture a US market that presents a "massive opportunity", Mr Keogh said.

"The market timing actually is quite perfect," he said. "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?'" he said. "And when all these things intersect, that's ideally when you want to throw the dart."

REUTERS