Volkswagen to Develop Low-Cost Electric Vehicles to Compete

On Tuesday, Volkswagen will develop low-cost electric vehicles to better compete with fierce Chinese rivals, Europe’s largest carmaker said. This comes after talks with Renault to team up on the project collapsed earlier this month.

Target Pricing and Launch:

Volkswagen said it aims to produce electric vehicles for the European market priced at around 20,000 euros ($21,746), adding that a world premiere is planned for 2027.

“It’s about entry-level electric mobility from Europe for Europe,” Volkswagen Chief Executive Oliver Blume said in a statement. “In doing so, we combine a clear commitment to Europe as an industrial location and a European industrial policy, and ultimately, we act in the interests of European customers.”

Project ID.1 and Competitive Landscape:

The project, dubbed ID.1, comes as Chinese rivals, some of which command a 30% cost advantage over Western peers, are muscling into Europe to grab market share and challenge established carmakers on their home turf.

Volkswagen said it would rely on a high degree of localization in Europe for the project, which would also help to cut transport routes of components, thereby reducing emissions.

Industry Preparedness and Cost-Cutting Measures:

Last week, Volkswagen said the European industry had two to three years to prepare for the competitive threat, warning that the sector’s survival was otherwise at risk.

As part of those efforts, Volkswagen is currently implementing 10 billion euros worth of savings and cost-cutting measures for its namesake brand by 2026.

Challenges and Political Support:

Volkswagen brand boss Thomas Schaefer said that the planned entry-level model would set technology, design, and quality standards despite the low price point.

He added that this had become more challenging due to higher energy, raw materials, and labor prices.

“One thing is clear: electromobility from Europe for Europe can only succeed with political support and competitive framework conditions,” Schaefer said.