(Reuters) — Volkswagen is deciding where to locate a new factory in North America to build electric vehicles for the U.S. market, the German automaker’s new head for the Americas said on Wednesday.

Scott Keogh, the newly appointed CEO of Volkswagen Group of America, said a new plant was needed to build a vehicle yet to be revealed under the Volkswagen brand, priced between $30,000-$40,000, that is due in 2020.

“We are 100 percent deep in the process of ‘We will need an electric car plant in North America,’ and we’re holding those conversations now,” Keogh told journalists at the Los Angeles auto 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.

Volkswagen announced earlier this month it would spend almost 44 billion euros ($50 billion) on developing electric cars, autonomous driving and new mobility services by 2023, while exploring areas of cooperation with U.S. automaker Ford.

To meet a production timeline for 2020, the new electric car will initially be sourced outside of the United States, Keogh said, but then will be produced at the newly chosen site.

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