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Volkswagen is aiming to create an entry model EV for the European market at a price point of just under $21,800.
The low-cost EV plan is part of a project known as ID.1, designed to aid the company to be able to compete better against the offering from China, where an established market with several manufacturers is already in place.
The news from VW comes after negotiations with Renault on a joint venture were aborted earlier this month, but the latter company still plans to release a low-cost successor to its electric Twingo city car.
Volkswagen wants to reveal is low-cost EV in 2027. Having already presented its ID.2all concept early last year, it has the design blueprint for the upcoming project.
In a statement, VW chief Oliver Blume said the ID.1 project would provide “entry-level mobility from Europe for Europe.” The company insisted the plan for accessible, sustainable vehicles on the continent could only happen with “political support and competitive framework conditions.”
Previously, EU automakers have been critiqued for focusing on high-end EV models at the expense of affordable options for the mass market. Analysis by the Brussels-based Transport & Environment (T&E) campaign group indicated a flawed strategy has resulted in a lack of affordable, entry-level European models coming to market in sufficient volumes.
Conversely, Beijing has focused on the domination of the global EV sector an industrial policy goal, backed by vast resources. A burgeoning domestic market sees around 15 Chinese companies, led by BYD, battle it out for supremacy in a vibrant market, with Elon Musk’s Tesla also vying for the top spot in the region.
Chinese EVs can have a 30% cost advantage over European competitors, underlining why they are also looking outward, aiming to smash established EU manufacturers in their native market. Euro imports of Chinese EVs soared from $1.6 billion in 2020 to more than $11 billion in 2023, currently representing almost 40% of EV imports into the EU.
As part of the fightback, VW said its home industry has two to three years to prepare for the competitive threat. Otherwise, it believed the entire EV sector could be in peril. VW intends to focus on short-supply chains and other forms of localization for ID.1, which will also cut back on emissions.
