By Sam Boughedda
Investing.com -- Volkswagen AG (DE:VOWG) announced Friday it plans to build a new manufacturing facility in Germany.
Volkswagen shares fell 8%.
The announcement comes shortly after the news that Tesla (NASDAQ:TSLA)'s long-awaited German gigafactory has gained conditional approval.
Volkswagen's new plant is set to cost approximately €2 billion ($2.2 billion) and will be in Wolfsburg-Warmenau, close to the company's main plant.
The new plant will make a new model of electrically powered sedans, codenamed Trinity. The plant's construction is scheduled to begin in spring 2023, with the production of Trinity starting in 2026.
“With this decision we are strengthening and sustaining the competitiveness of the main plant and giving the workforce a robust long-term perspective," said Volkswagen CEO Ralf Brandstätter.
The company added that the new Trinity factory "is a key component of the largest modernization program in the history of Volkswagen’s main location."
Volkswagen said it aims for a production time of 10 hours per vehicle at the factory, significantly less than the current time it takes to build other vehicles at other sites. In comparison, it reportedly takes the company more than 20 hours to manufacture each Golf or Tiguan model.