Volkswagen: Electric car for less than 20,000 euros to arrive in 2027

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Gloomy prospects have dominated the headlines at Volkswagen in recent months. At a works meeting, the Group management now wants to take a step forward. A three-phase plan was presented to lead Europe's largest car manufacturer back to success in the long term. New electric cars will play a central role in this.

The VW ID.2all, whose basic model will cost less than 25,000 euros, will be officially presented this year. It is not expected to be available on the market in significant numbers until early 2026. VW is taking a year longer with an electric car underneath. The entry-level model is expected to cost around 20,000 euros. Thomas Schäfer, CEO of the Volkswagen brand, promises an “affordable, high-quality and profitable electric Volkswagen from Europe for Europe”. This is the “Champions League of automotive engineering”.

Falling costs

Together with the ID.2all, it will be part of the new electric small car family being developed under the umbrella of the Core brand group within the Volkswagen Group. To achieve these prices, Volkswagen will have to make compromises that are not yet being communicated. What is clear is that the Group expects battery production costs to continue to fall. The two small cars will very probably be fitted with lithium iron phosphate (LFP) batteries, whose energy content is calculated to be close to what the majority of customers will accept as the lower limit.

LFP batteries have a cost advantage over nickel-manganese-cobalt (NMC). Nevertheless, the energy content is likely to be kept low. We expect 40 kWh for the series model at the base and around 50 to 60 in the top model. Stellantis and Mini are also currently following this path. The competitors are keeping a close eye on each other to see how customer acceptance develops.

Golf and T-Roc as electric cars

Production of the next Golf is being outsourced to Mexico. Volkswagen intends to fill the capacity freed up in Wolfsburg with the production of the upcoming electric VW Golf on the Scalable Systems Platform (SSP) and a T-Roc with electric drive. VW is talking about a volume of 500,000 vehicles per year. Wolfsburg is to become the “capital for the new all-electric compact class”, says Schäfer, promoting his project. Under the term SSP, Volkswagen is currently developing the next generation of a purely electric, fully digital and highly scalable mechatronics platform based on a standardized software architecture. This is being driven forward with the new partner, Rivian.

Catch up, attack, lead the way

Volkswagen wants to implement a plan in three phases by 2030. The first goal has been defined as “catching up”. The Group wants to increase its competitiveness, reduce costs and increase the margin per vehicle. In addition, the existing model range is to be “selectively expanded”. This should primarily mean that the strategists are looking for gaps in the SUV range – across the Group.

The second keyword is “attack”. Nine new models are to be launched on the market in the next two years, and the two small cars mentioned above will play an important role in this. It may be possible to estimate how great the demand could be by looking back: The last new e-Up was marketed for 30,000 euros including a fully equipped car with no alternatives, which was possible at the time because there was hardly any competition. A well-made small car with a sufficient range without a lot of frills would certainly have a good chance on the market.

Finally, in the third phase, VW wants to “lead the way”. The aim is to become the technologically leading brand in the volume segment, setting new standards that will drive mobility forward worldwide. Without going into detail, this is likely to include at least three areas. When it comes to batteries and charging, Volkswagen must improve on its current performance if it wants to significantly increase the share of electric cars in the volume segment. This is essential to be successful in the Chinese market, among others, in the long term and to comply with European CO₂ regulations. The second major construction site remains the area of infotainment, which plays a greater role in the Chinese market than in Europe. And finally, Volkswagen must keep an eye on developments in the field of autonomous driving.

High targets

The prospect of technology leadership in these three areas alone, where the pace of innovation is currently extremely high, is ambitious. To achieve this, the Group will have to dig deep into its internal structures, not least to be able to react to changes more quickly than before. If, at the same time, it succeeds in not losing sight of the concerns of its existing clientele, it may succeed. It remains to be hoped, not least for the sake of VW employees, that those responsible at the top have learned from the mistakes of the ID.3 launch.

(mfz)