Volkswagen will develop cheap electric vehicles in a bid to better compete with fierce Chinese rivals, Europe’s largest carmaker said on Tuesday, after talks with Renault to collaborate on the project collapsed earlier this month.
The aim is to produce electric vehicles for the European market with a price of around 20,000 euros ($21,746), Volkswagen said, adding that a world premiere was planned for 2027.
“It is about entry-level electric mobility from Europe for Europe,” Volkswagen CEO Oliver Blume said in a statement. “We hereby combine a clear commitment to Europe as an industrial location with a European industrial policy and ultimately act in the interests of European customers.” The project, called ID.1, comes as Chinese rivals, some with a 30% cost advantage over Western peers, rush into Europe to grab market share and attack 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 shorten component transportation routes, reducing emissions.
Last week, Volkswagen said the European industry has two to three years to prepare for the competitive threat, warning that the sector’s survival would otherwise be at risk.
As part of these efforts, Volkswagen is currently implementing 10 billion euros in savings and cost-saving measures at its namesake brand by 2026.
Volkswagen brand boss Thomas Schaefer said the planned entry-level model would set standards in technology, design and quality despite its low price, adding that this had become more challenging due to higher energy, raw material and labor costs.
“One thing is clear: electromobility from Europe for Europe can only succeed with political support and competitive framework conditions,” said Schaefer.
First print: May 29, 2024 | 12:26 pm IST