Source: Gasgoo Author: Ramy
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According to the Financial Times, Volkswagen Group is considering partnering with other carmakers to produce cheaper electric cars, which in turn would help itself compete with Chinese electric carmakers.
Volkswagen Group CEO Liver Blume told a news conference in Berlin that the company plans to decide later this year how to produce electric cars that cost less than 25,000 euros. Amno Antlitz, the group’s chief financial officer, admitted that “it is very difficult to make money in such an area” and that Volkswagen is “considering cooperation” to share costs.
Image source: Volkswagen
In Europe, electric cars tend to cost 15,000 euros more than combustion-engine versions, and closing that price gap will be crucial for consumers to switch to electric cars and compete with Chinese manufacturers. There are very few electric cars priced below €30,000 in Europe. The high price tag is one of the reasons for the slowdown in EV sales in the region, despite the lower cost of ownership.
Relatively speaking, electric vehicles are more expensive to manufacture, with about 40% of the cost coming from batteries, and most traditional automakers still make most of their profits from internal combustion engine vehicles. Blume has previously said that the Volkswagen Group will not be able to produce an electric car priced under 20,000 euros before 2030.
In the van segment, most European automakers already collaborate, and some have joined forces in the past to build smaller vehicles. Last month, French carmaker Groupe Renault confirmed it was in talks with Volkswagen to jointly develop low-cost electric vehicles.
Groupe Renault’s Dacia brand announced this week that its Spring electric car imported from China will be priced below £15,000 in the UK. But to produce models at this price in Europe, automakers must further cut costs. Volkswagen has previously said that its cheapest electric car, the ID.2, will be launched next year with a starting price of about 25,000 euros.
In 2023, the Volkswagen Group’s electric vehicle sales will account for only 8.3% of its total sales. Independent auto analyst Mathias Schmidt said carmakers must pool spending in a “band of brothers” approach to cut vehicle costs.
