11 December 2023
Entry-level Volkswagen EV pitched at €20,000 (£17,000) may become possible by the middle of the decade
European giants reportedly in early talks about their respective plans to launch small, cheap electric cars this decade
The Volkswagen Group is seeking a partner for the joint development of a circa-£17,000 electric car, according to a new report, which cites Renault as one potential collaborator.
German trade publication Handelsblatt reported that Volkswagen was in “very early” talks with Renault on the subject, citing sources said to be familiar with the matter.
Volkswagen and its partner firm – which is yet to be decided – could produce a combined 200,000-250,000 cars per year, added the newspaper.
A spokesperson for Renault declined to offer comment on the report. Autocar has also contacted Volkswagen.
Each firm has already detailed its own plans to produce an affordable, mass-market EV, with Volkswagen looking to launch the ID 1 in the coming years and Renault developing a production version of the reborn Twingo concept.
Volkswagen Group chief financial officer Arno Antlitz said in June that the German giant was working “full steam ahead” to develop an EV priced at around €20,000 (£17,000).
Speaking on the larger, €25,000 (£22,500) ID 2, Antlitz added that raw material costs would be key.
He said: “[We have also seen a slight] improvement or relief on the raw material cost. Look at lithium: it came down. Nickel came down. So from this perspective, we’re quite confident that we can achieve that €25,000 target and, at the same time, have a decent margin.”
The ID 1 was planned to use an all-new architecture, with Skoda understood to be playing a key role in this platform’s development, but little detail is yet known.
The future of the ID 1 project has more recently faced uncertainty. In November, Volkswagen Group CEO Oliver Blume told a conference in Berlin that he believed it would be possible to produce a €20,000 EV by the second half of the decade but that VW had yet to make a final decision on the project.
The firm is currently undergoing a wide-reaching cost-cutting initiative: Volkswagen brand boss Thomas Schäfer is reported to have announced a three-year programme to save €10 billion (£8.6bn), with measures including job cuts.
It followed Schäfer’s July proclamations that “the roof is on fire” and that the brand was “letting the costs run too high in many areas”.
This could indicate a need to streamline existing development programmes with a focus on cost efficiency.
The Volkswagen Group has form for sharing platforms with other firms: Ford is using its MEB EV platform for the new Explorer and an adjacent model, tipped to revive the Capri name.
The next Twingo, on the other hand, is tipped to become a production car by 2026, priced below €20,000 or €100 (£85) per month.
Key to this low cost will be the focus on efficiency (Renault claims the Twingo will yield 6.2mpkWh), rather than a large battery.
The use of the Renault Group’s Ampr Small platform (previously called CMF-BEV) should help to further reduce its price, with economies of scale provided by its use under the upcoming Renault 5, Renault 4 and Nissan Micra.
However, Renault Group chief Luca de Meo has hinted that the French firm could use an outside partner to help develop the Twingo.
He said: “We’re confident in its potential to be a real game‑changer because we know we have a great track record with these kinds of projects.
“Last but not least, we have ongoing discussions with OEM partners to share the development costs.”
He hinted that the Twingo could help Renault to win over buyers who might otherwise consider Chinese cars, with technology and infotainment suited to tech-hungry buyers.
De Meo said that the Twingo would match those Chinese alternatives on price.
The cheapest electric car currently on sale in the UK is the BYD Dolphin, priced from £26,140. It will next year face stiff competition from the Citroën e-C3, which is tipped to launch at £22,000-£23,000.