Volkswagen to develop low-cost electric car to tackle Chinese rivals
The largest automaker in Europe, Volkswagen, announced on Tuesday that it will produce affordable electric cars in an effort to better compete with its aggressive Chinese rivals. This comes after talks to collaborate on a new project with Renault (RENA.PA) had broken down earlier this month.
Volkswagen (VOWG_p.DE), opens new tab stated that the goal is to manufacture electric cars for the European market that cost about 20,000 euros ($21,746). A global debut was scheduled for 2027.
Oliver Blume, the Chief Executive of Volkswagen, stated in a statement, “It is about entry-level electric mobility from Europe for Europe.” By doing this, we act in the best interests of European consumers while also demonstrating a strong commitment to Europe as an economic location and industrial strategy.
The project, known as ID.1, is being launched when Chinese competitors, some of whom have a 30% cost advantage over their Western counterparts, are pushing their way into Europe to take market share and challenge top automakers there.
Volkswagen stated that the project will be heavily localized in Europe, which would also contribute in lowering component transportation routes and emissions.
Last week, Volkswagen warned that the industry’s viability in Europe was in jeopardy unless it gave the European market two to three years to prepare for the competitive challenge.
Volkswagen is presently investing 10 billion euros’ worth of cost-cutting and savings initiatives at its eponymous brand by 2026 as part of such efforts.
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The projected entry-level model would set benchmarks in terms of technology, design, and quality despite its low price point, according to Thomas Schaefer, head of Volkswagen’s brand. He said that this had become more difficult because of rising expenses for labor, raw materials, and energy.
“It is obvious that electromobility from Europe for Europe can only thrive in the presence of competitive framework conditions and governmental support,”
Schaefer stated.
