Automotive News Europe — 2024-05-29
Automotive Industry
VW plans to rely on a high degree of localization in Europe for the entry-level BEV project.
Volkswagen Group said it will build battery-electric cars priced at €20,000 ($21,756) in Europe without a partner after talks with Renault on joint development of small BEVs collapsed.
VW said it would rely on a high degree of localization in Europe for the entry-level BEV project, which would help to cut transport routes of components and reduce emissions.
VW brand boss Thomas Schaefer said that despite the low-price point, the entry-level models would set standards in terms of technology, design and quality, adding this had become more challenging due to higher costs for energy, raw materials and labor.
"The future is electric. In order for electromobility to become widespread, attractive vehicles are needed, especially in the entry-level segment," Schaefer said in a statement on Tuesday, 28 May 2024.
Both projects come as Chinese rivals including BYD and SAIC's MG Motor are expanding their EV lineups in Europe.
"It's about entry-level electric mobility from Europe for Europe," VW Group CEO Oliver Blume said. "In doing so, we combine a clear commitment to Europe as an industrial location, a European industrial policy and ultimately act in the interests of European customers."
In its initial push toward more affordable EVs, VW is developing what it calls its "Electric Urban Car Family" that will be similar in size to the VW Polo.
The automaker said it plans to present four battery-powered cars from the family priced below €25,000 at the end of 2025. Two new electric hatchback cars are planned, one from VW called the ID2 and one from Cupra, as well as two small SUVs -- one from Skoda and one from VW. All four vehicles will be built in Spain.
VW's lowest-priced BEV currently on sale is the compact ID3, which starts at about €40,000.
Czech production possible
"With the project on all-electric entry-level mobility for €20,000, the Volkswagen Group is now taking the next, consistent step," VW said.
VW brand's entry-level hatchback will be called the ID1 and will be a successor to the e-Up which is out of production. Skoda and Seat are expected to get sibling models. VW did not give any information about where the entry-level BEVs will be built. German media reports said the Czech Republic could be the production location.
Discussions with Renault on joint development collapsed because VW's powerful works council wanted the work to remain inhouse, according to German press reports. Renault is launching a new-generation electric Twingo in 2026 with a target price of below €20,000.
Europe's automakers are under pressure to update their lineups just as slow economic growth and waning subsidies weigh on EV demand. Meanwhile, Chinese brands are expanding in the region with cheaper models. BYD plans to offer its Seagull hatchback in Europe next year at a price below €20,000.
Stellantis earlier in May 2024 said it will sell cars co-developed with a Chinese partner Leapmotor in Europe from September 2024 as it tries to lower the cost of its electric offerings.
Last week VW said the European industry had between two and three years to prepare for the competitive threat, warning that the sector's survival was otherwise at risk.