Volkswagen is confident it can deliver an affordable EV (sub-$27K) and profitably

The German automaker’s chief financial officer believes the Volkswagen Group will be able to deliver an affordable EV with new, cheaper battery materials and streamlined production.

To accelerate EV production and maintain its position as a market leader, VW revealed a nearly $200 billion (€180 billion) investment in March.

With a significant portion (68%) dedicated to electrification and digitalization, Volkswagen plans to cut costs to drive profits while enabling them to build cheaper EV models.

A big focus is on battery technology. VW is working with unified battery cell tech that they claim has the potential to lower costs by up to 50%.

Volkswagen revealed the ID 2all concept in March to showcase its intentions, with a starting price under $27K (€25,000). The affordable EV has as much space as the VW Golf with the price of a Polo model.

Riding on VW’s next-gen MEB entry platform, the ID 2all will feature “particularly efficient drive, battery and charging technology.”

Although Volkswagen has yet to release the full specs, the EV will feature an electric motor with 166 kW (222 hp) and a calculated WLTP range of around 450 km (279 mi). It will also be able to charge to 80% in under 20 minutes.

CEO of Volkswagen Passenger Cars, Thomas Schafer, said, “The ID 2all shows where we want to take the brand” with improved designs and top-tier technology for an affordable price.

More recently, Volkswagen Group chief financial officer Arno Antlitz told Autocar he is confident the automaker will be able to deliver cars at this price point, pointing to cheaper battery materials and manufacturing.

Volkswagen building an even more affordable EV, the ID 1

Antiliz said, “For the time being, we’re quite confident that we can achieve that price point,” adding:

There are a lot of innovations coming on the technical side. This car will have the first in-house battery cells from our Valencia plant. We’re just ramping up. We will have much more scale by then.

Looking at Nickel and Lithium prices coming down, Antiliz said the firm is seeing the relief in raw material costs, as he claimed:

So from this perspective, we’re quite confident that we can achieve that €25,000 [£22,500] target and, at the same time, have a decent margin.

Although his comments were aimed at the ID 2all EV, the report notes these developments could result in an even more affordable EV model, the ID 1.

Shafer told Autocar in March that the Polo is one of its most successful models and “we’re going to use that vehicle concept in the future as well.” The ID 1 electric car is expected to start around $20,000 (€17,000) as its smallest, cheapest VW brand EV so far. However, no other information has been released about the model.

After EVs accounted for a record 7% share of total deliveries last year, Volkswagen hit a milestone, producing its one millionth electric vehicle based on its MEB platform last week.

Electrek’s Take

Since Volkswagen revealed plans for an affordable EV, several automakers have followed suit. Stellantis is expected to release a low-cost (sub-$27,000) electric model through the Citroën brand next year, called the Citroën e-C3 city car.

Meanwhile, Hyundai’s sister company Kia plans to build “small and mid-size EVs” from 2025, including an entry-level EV (presumably called the EV1).

And let’s not forget Volvo’s recently unveiled EX30, starting at $35K, due out next year as its smallest and cheapest EV. Those of you holding out for cheaper electric models, they are on the way.