Initial work at the hub in Knoxville will include research opportunities for UT doctoral students and will focus on electric vehicles and developing lighter components from composite materials, according to a joint statement from the three partners.

"Working with the University of Tennessee and Oak Ridge National Laboratory is a great opportunity to continue growing Volkswagen's engineering footprint in the North American region," said Wolfgang Demmelbauer-Ebner, VW's executive vice president and chief engineering officer for the region. "This hub, along with other research institutions here, is an integral part of Volkswagen's global research and development efforts and can also directly contribute to vehicles in North America."

Volkswagen has partnered with the University of Tennessee since opening its Chattanooga Assembly plant in 2011. The plant assembles the Volkswagen Passat sedan and Atlas and Atlas Cross Sport SUVs. The company broke ground in the fall on a new electric vehicle production facility in Tennessee.

 Oak Ridge National Lab Director Thomas Zacharia said the collaboration benefits science and industry.

"By identifying difficult challenges and pursuing creative solutions with immediate industrial application, we can accelerate fields such as materials science, energy storage and advanced manufacturing while making vehicles better, safer and more fuel efficient," Zacharia said.

VW also has innovation hubs in Barcelona, Spain; Tel Aviv, Israel; and Tokyo, Japan.