German OEM Volkswagen is aiming to launch a €20,000 BEV in 2027, a price point currently unmatched for Western-made battery vehicle, and which could therefore help usher in a breakthrough in terms of affordable EV adoption.
The OEM describes the new model as targeting the "entry-level" segment, with CEO Oliver Blume saying that this will allow the firm to capitalise on its historical strengths and that "generations of people associate the strong brands of the Volkswagen Group with their first car — and with affordable mobility".
VW has not, however, released a concept for the vehicle or any specifications, although it is likely to be a compact A or B segment vehicle.
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It is unusual for an automaker to announce its intentions for pricing so far out from the launch of a vehicle, perhaps suggesting a greater level of confidence at VW that it can drive costs down and produce the unprecedentedly cheap BEV at a profit.
Sceptical observers will note, however, that VW's statement does not explicitly promise that the new vehicles will be priced at €20,000, but only that "Volkswagen has been working for some time to offer compact, particularly inexpensive electric vehicles in the price range of around €20,000".
However, the automaker is already progressing steadily towards such low costs on its BEVs, ahead of the launch of its Electric Urban Car family, which the company says will bring EVs to market under €25,000 by late 2025.
The family will include two new compact BEVs, one under the VW brand and one with a Cupra marque, as well as two small SUVs from Skoda and one from VW, all of which will be made in Spain.
Achieving the the desired price tag will be a stiff challenge for VW, although the firm may be unlikely to face Chinese competition in the same price bracket as a result of widely expected EU tariffs on Chinese EVs set to be announced soon.
"Volkswagen for this project is going to rely on a high degree of localization in Europe, which in turn benefits Europe as an industrial location. Another advantage: long transport routes of components are reduced and consequently CO2 pollution is avoided," the firm says.
VW may also look to learn from its ties to Chinese OEM Xpeng, with which it has a JV to produce advanced software EVs for the Chinese market, on the software side. While European manufacturing will not avail VW to low labour costs and subsidy boosts that Chinese EV production receives, the firm says that "despite the attractive price, our vehicles will set standards in the entry-level segment in terms of technology, design, quality, and customer experience".
But despite its best efforts, VW may still be looking for outside help from legislators in driving costs down to the €20,000 sweet spot.
"One thing is clear: electromobility from Europe for Europe can only succeed with political support and competitive framework conditions," says VW brand CEO Thomas Schaefer.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
