Volkswagen has announced plans to invest €3.5 billion ($3.7 billion) in e-mobility and digitalization at its German plants. The modernization plans are part of an agreement with the company’s General Works Council (an organization similar to a labor union, which represents VW’s workers).

Under the agreement, the Volkswagen plants at Wolfsburg and Zwickau will produce EVs and components based on the new Modular Electric Drive Kit (MEB). The new e-Golf, which is based on the existing MQB platform, will be produced in Dresden at the Transparent Factory, as well as at Wolfsburg.

The MEB is the foundation for what VW calls a new generation of long-range EVs that will be connected, autonomous, and priced for the volume market. The first production MEB vehicle, a version of the I.D. concept shown this year at the Paris auto show, is to be introduced in 2020 with a range of up to 373 miles and a price similar to that of a legacy diesel Golf. If VW actually pulls this off, it could be the death knell for ICE vehicles – and quite possibly for one or more of the companies that make them.

Volkswagen is also reconsidering its policy of relying on suppliers for EV batteries – it plans to develop a pilot plant for battery cells and modules.

“With the pact for the future, we will be entering the field of next-generation e-mobility,” said Bernd Osterloh, Chairman of the General Works Council. “The new cars based on the Modular Electric Drive Kit and electric components from our plants will make our German locations pioneers of electrification within the Volkswagen Group. The Works Council has ensured that these future-oriented vehicles will be made in Germany and not in other countries.”

Source: Volkswagen via Green Car Congress