Dr. Herbert Diess, CEO, Volkswagen AG, speaks to members of the media during the reveal of new 2020 Passat at the North American International Auto Show in Detroit, Michigan, U.S., January 14, 2019. REUTERS/Jonathan Ernst

DETROIT (Reuters) - Volkswagen's VOWG_p.DE Chief Executive Herbert Diess said an $800 million investment to build a new electric car in Chattanooga, Tennessee should help ease tensions with United States President Donald Trump.

“We hope that with the investment in Chattanooga we could make a contribution, step forward, to avoid tariffs between Europe and the U.S., and we will work further on it,” Diess said at the sidelines of the Detroit Auto Show.

Diess also said the multi-brand carmaker was considering building a U.S. factory for its premium brand Audi.

The German automaker said it is adding 1,000 new jobs and that electric vehicle production in Tennessee will begin in 2022.

“We have been strongly encouraged to invest more which we will do” Diess said on Monday.