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With shift to EVs, Volkswagen US chief warns of industry challenges

The top US executive at Volkswagen AG said on Thursday that the United States faces major challenges in ramping up battery production to facilitate the shift to electric vehicles, including attracting skilled workers, mining key metals and tackling supply chain issues.

Scott Keogh, CEO of Volkswagen Group of America, told an Automotive News forum in Washington that the shift to EVs was the biggest “industrial transformation in America.”

Automakers and battery makers are pledging to invest tens of billions of dollars to build new EV battery and assembly plants across North America to increase production of electric vehicles. The move, which focuses on vehicles powered by new advanced batteries rather than gasoline, requires the United States to address a series of challenges, Keogh said.

These challenges include attracting enough skilled workers, significantly boosting and facilitating mining in the United States for minerals essential to the production of lithium batteries for EVs, addressing supply chain issues and , more generally, to take care of health care, education and infrastructure, Mr. Keogh said.

Mr Keogh told Reuters on the sidelines of the forum that hundreds of thousands of people could be employed by 2030 in the production of the US battery industry.

“It’s about manpower, infrastructure and investment,” Keogh said.

President Joe Biden has set a goal of having 50% of new vehicle sales be electric or plug-in electric by 2030, but he has not endorsed phasing out sales of gas-powered vehicles to a precise date.

Mr. Keogh estimates that the United States manufactures 150,000 to 200,000 batteries a year and that, in seven years, “we will have to manufacture 8.5 million” a year.

“It’s a scale of investment that, honestly, is going to make the Industrial Revolution look like a walk in the park. It’s huge,” Keogh said.

Mr. Keogh also said the United States needed to do more to build up its production capacity. The US manufacturing sector has grown from over 17 million jobs in 2000 to 12.8 million today. It is back to roughly pre-COVID-19 levels.

“We need to build a collective ecosystem that transforms America into a manufacturing society again. I think America has become a service economy,” Keogh said. “The challenge of making someone who worked in a Starbucks taking 20-minute breaks, smoking a cigarette in the back and now hopping in a factory…is a whole new world.”

According to Mr. Keogh, the long working days of factory workers are quite different.

“It’s brutal, difficult and challenging work,” said Keogh.

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