Automotive News Europe — 2024-01-05
Automotive Industry
Volkswagen is delaying volume production of a new affordable battery-electric car because weaker Euro 7 anti-pollution rules mean that smaller cars with combustion engines will be allowed to be sold longer than anticipated, according to a German media report.
The small EV, based on the ID.2all concept unveiled last March, is scheduled to go into full production in May 2026 instead of 2025, auto motor und sport reported.
The production ID.2all will be sold at a base price of less than €25,000 ($27,200). The retail price will be higher than ICE rivals such as VW's own Polo that will be on the market at the same time. The Polo costs less than €22,000 in Germany.
VW and other European automakers had anticipated that they would no longer be able to sell small ICE cars profitably by the end of the decade because of tough Euro 7 anti-pollution rules. After strong lobbying from the industry, EU countries have agreed not to change the existing Euro 6 test conditions and emissions limits for cars and vans, meaning that small ICE cars can continue to be built without costly upgrades that would make them unprofitable.
VW will still unveil the production ID2all in 2025 and build small numbers of the model until the full ramp up the following year.
However, the delay in volume production will put VW further behind European rivals such as Stellantis, which has launched the Citroen e-C3 full-electric small BEV that starts at €23,300, and Chinese automakers that are targeting Europe with cheap electric cars.
Production shake-up
The ID2all's delay comes amid VW brand boss Thomas Schaefer's shake up of the automaker's production network in Europe to reduce costs.
From now on, only 80% of the maximum forecast sales volume of a new model will be planned for production, Schaefer told auto motor und sport. VW's previous production planning included a buffer in case demand was higher than anticipated.
For example, if the sales department estimated that they would sell 150,000 units a year of a new model, production was planned at 170,000 vehicles.
Large overcapacities quickly arose when new orders collapsed, Schaefer said. He said if a new model had higher sales than forecast, the extra demand will be met by additional shifts.
The new 80% planning is being used for the first time for production of the latest new Passat midsize model in Bratislava, Slovakia.
"We will implement this for all future models and have already planned for it as part of the plant allocation," Schaefer said.