VW wants to offer electric cars for 20,000 euros

Volkswagen would like to offer an electric car “in the price range around 20,000 euros”. “I think that’s a valuable consideration and a sensible goal for the VW brand,” said Bild am Sonntag CEO Oliver Blume.

For Volkswagen, this would be the “second next step”. In mid-March, VW had already announced the electric small car ID.2all, which should cost less than 25,000 euros. The two-door must have a range of 450 kilometers and front-wheel drive. VW also announced at the time that the manufacturer was working on an electric car for 20,000 euros “despite all the challenges”.

Only slowly falling battery costs slow down cheap e-cars

An average battery of 58 kWh will cost almost 15,000 francs in 2021. This makes it clear how difficult it is to sell an electric car for less than 20,000 euros at a profit.

Prices below 20,000 would be necessary so that small electric cars can also compete with internal combustion engines in terms of purchase price – in terms of total cost over the whole life cycle, they are usually cheaper today.

The problem: Rechargeable batteries have become cheaper over the last decade, but now prices are falling very slowly. In 2022, due to rising raw material prices, batteries will even cost slightly more than in 2021. This development will slow down cheap e-cars.

The solution: The car manufacturers are therefore increasingly relying on cheaper and more environmentally friendly lithium iron phosphate batteries (LFP), especially in the small car segment, which are not necessary compared to the lithium nickel cobalt manganese batteries (NMC) that are still common today. are nickel and cobalt, but provide a slightly shorter range. Large price reductions are probably no longer possible with LFP batteries, because the share of the battery in the total costs is no longer as high as it used to be.

Important Chinese market

According to Blumes, VW should be “the strongest international carmaker” in the important Chinese market. In China, a quarter of all cars sold in 2022 will be electric vehicles. VW expects this share to rise to 50 percent in the next two to three years.

On the issue of Chinese competition, Blume said the Chinese had learned a lot in recent decades and showed a tremendous pace of innovation. “They use e-cars for short distances and in the big megacities,” said the VW boss.

In rural areas, VW cars with hybrid or combustion engines continue to be “very successful”. The Volkswagen brand “has great appeal”.

VW sales in China fell 14.5 percent in the first quarter of this year. The People’s Republic is VW’s most important market. Blume said VW is still the market leader there for combustion models. “We want to transfer our powers to electric vehicles.”

Dacia with an electric car for 20,000 francs

The Romanian manufacturer Dacia already offers a small electric car in Europe for more than 20,000 CHF. According to the company, the Dacia Spring has a range of up to 230 kilometers. Dacia is a subsidiary of Renault.

Renault itself wants to launch an electric small car in the ID.2all price range in 2024. The Opel parent company Stellantis also has such plans.

(oli/sda/afp)