Volkswagen is planning to build a new factory in North America to build electric vehicles for the U.S. market, while the company is taking teps in the Chinese market.

Scott Keogh, the newly appointed CEO of Volkswagen Group of America, said on Wednesday at the Los Angeles auto show that the location of the company's North America factory for electric vehicles has not yet been decided. he 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.

An electric car that could take on Silicon Valley’s Tesla Inc 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 Motor Co.

Volkswagen has already a U.S. plant in Chattanooga, Tennessee.

Seperately, SEAT - a VW Group company - signed a Memorandum of Understanding with Volkswagen Group China and Anhui Jianghuai Automobile Group Corp., Ltd (JAC). The agreement was signed by the Chairman of the Board of Management of Volkswagen AG Dr. Herbert Diess, JAC President An Jin and SEAT President Luca de Meo, in the presence of Chinese President Xi Jingping and Spanish Prime Minister Pedro Sánchez, at a ceremony held at the Palace of Moncloa in Madrid, the official residence and workplace of the Spanish Prime Minister.

Under the agreement, all parties will leverage their technology and product strengths to develop a battery electric vehicle platform for production at JAC Volkswagen. JAC Volkswagen will introduce the SEAT brand by 2021, and jointly electrify SEAT products. The construction of the JAC Volkswagen R&D center will start before the end of 2018 and will focus on key areas such as connectivity, autonomous driving and other future strategic directions.

SEAT, Volkswagen Group China and JAC signed an agreement last July in Berlin, in the presence of German Chancellor Angela Merkel and China’s Prime Minister Li Keqiang, whereby SEAT formed part of the joint venture and became the Volkswagen Group’s lead brand in this project.

The products which will be manufactured on the battery electric vehicle platform will address the e-mobility requirements of Chinese customers. The R&D center, which will be established through joint efforts, aims to develop connectivity and autonomous driving technologies specifically tailored to the Chinese market.