Volkswagen plans to decide on the location of a new electric vehicle plant by the end of March and will increase production output in the second half of 2022, reports company officials.

The company announced last year plans to build a new state-of-the-art car factory close to its headquarters in Wolfsburg, Germany, to increase EV output as Tesla builds a plant near Berlin.

This factory is part of VW group's Trinity project, under which the carmaker hopes to build a flagship electric sedan in Wolfsburg from in 2026. The VW works council hopes the strategy will secure the site's future as Volkswagen prepares to stop selling internal combustion-engine cars in Europe in 2035.

Volkswagen saw its share price tumble in the fourth quarter of 2021. The automaker has since seen a partial recovery, rising slightly upon its recent announcements from 187.8 euros ($213.81) at the opening to 188.14 euros.

The works council reported Volkswagen produced 330,000 fewer vehicles than forecasted at the Wolfsburg plant in 2021 due to a shortage of semiconductors. Just under 400,000 vehicles rolled off its production line. Volkswagen announced plans to shutter night shifts on some production lines because of a lack of chips.

But Chief Executive Herbert Diess said in a statement that he hopes to increase production in the second half of 2022. Top models of Volkswagen's premium brands are already sold out for all of 2022 and the company’s trucks are also seeing large numbers of bookings.