The Volkswagen ID.4 electric crossover SUV is now being built at the German automaker’s vehicle factory in Chattanooga, Tennessee. It’s the company’s first EV to be manufactured in the US and signals that a more affordable version of the ID.4 is on the horizon.

VW says it plans on ramping up production at its Chattanooga facility to 7,000 vehicles per month “later this year,” with the goal of making even more vehicles per month in 2023. The first customer deliveries are expected in October 2022.

The ID.4 is VW’s most popular EV, having delivered 190,000 vehicles to customers globally since its release in 2021. VW CEO Herbert Diess, who is stepping down in September, said in May 2022 that the company was “basically sold out on electric vehicles in Europe and in the United States” for the year.

VW said that kicking off ID.4 production in Chattanooga should help with its supply problems. The company has “a robust number of reservations for the ID.4 currently and localized assembly should help us to fulfill those orders,” a spokesperson said.

Pricing is another reason why this news is significant. Back when the ID.4 was first announced in 2020, the base model ID.4 was set to start at $40,000, which later went up to $41,230. The company said it wanted its US-made ID.4s to start at $35,000 — or $27,500 with the federal tax credit. Whether that’s still the case, though, is still unknown; the VW spokesperson said pricing will be announced soon.

The cheaper ID.4 will feature a 62kWh battery, as compared to the more expensive 82kWh battery versions that will come with either rear-wheel or all-wheel drive. The 62kWh versions will likely have a more constrained range than the larger battery packs, which enable around 250 miles of range.

Initially, the ID.4’s battery pack, which is comprised of 288 pouch cells in 12 modules, was produced by South Korea’s LG Chem. But now, VW is using batteries supplied by SK Innovation, another South Korean company that recently opened a $2 billion factory nearby VW’s plant there.

VW is also touting parts made in other US states, including steel in Alabama and Ohio, interior parts in Indiana and South Carolina, and electronics components in Kentucky and North Carolina. VW’s Chattanooga factory employs more than 4,000 people and is actively hiring more than 1,000 new workers through 2022, which VW says will help meet high customer demand for the ID.4 and Atlas SUV.