News: Recent Hints of an Entry-Level EV from Volkswagen

Sub-$25,000 “People’s” Electric Car Under Discussion

While it isn’t really surprising that auto makers are beginning to put all of their eggs in the electric vehicle (EV) basket, some recent news from the Volkswagen Auto Group made headlines recently.

After years of teasing potential EVs based on its new MEB platform, Volkswagen may have one more tease up its sleeve, Reuters recently reported. According to the source, at an upcoming board meeting, Volkswagen will be discussing the future of its EV program; and one topic of discussion will be the development of an entry-level EV with a starting price of 20,000 euros (about $23,000).

With a production goal of 200,000 units per year, this new Volkswagen EV would likely be pushed as the new “people’s car,” a segment that Volkswagen as always dominated.

I.D. Family Issues

This new EV (tentatively called the I.D. Neo) would join the same I.D. family with the already announced I.D. Crozz crossover and I.D. Buzz, Volkswagen’s EV edition of the classic VW mini bus. Also reportedly on the way is a midsize sedan, the I.D. Aero, which would likely replace the Passat in Volkswagen’s lineup.

What Volkswagen has not yet figured out is: (1) how it is going to manufacture all of these new EVs, and (2) how it will avoid laying off a large number of employees in the process.

The first of those two problems could be resolved by a reported partnership with Ford, and use of a Ford manufacturing plant in Turkey. Another potential solution is the conversion of Volkswagen’s plant in Emden, Germany. However this then would open the door to problem number two.

Because EVs are much less complicated to build than internal combustion vehicles, the number of employees required to build EVs is much smaller. If Volkswagen begins building EVs at one of its current manufacturing plants, it will likely be forced to lay off a large number of employees. 

Because of this complication, Volkswagen must reach an accord with German labor unions before anything can happen. That is why VW is also reportedly looking at its plant in Chattanooga, Tennessee, as one of 16 key global “e-locations” for EV production.

While the news is a bit unsubstantiated, what makes it interesting is that Volkswagen has now committed itself to becoming the European (and maybe world) leader in affordable EVs, whether or not that was its intention. While we know that the other automakers are not far behind, Volkswagen is now staked out becoming a leader in the EV market as the key part of its ongoing quest to be the world’s largest automaker.

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