VW holds back on electric supermini
Decision not to launch Polo-sized model for at least three years keeps group out of key market
Volkswagen will not produce a small electric car for at least another three years, leaving the German brand without a rival to the bestselling Renault Zoe even as its parent group ploughs €35bn into becoming the world’s largest manufacturer of battery-powered vehicles.
In a product strategy seen by the Financial Times, VW outlined plans to bring at least a dozen new models to market over the next five years, including a supermini emissions-free vehicle aimed at drivers of its T-Cross or Polo cars.
That car, currently referred to internally only as “small BEV [battery electric vehicle]”, will be priced at €20,000-€25,000 — at least 30 per cent cheaper than VW’s flagship ID.3, which was launched this year.
However, the German carmaker — which has developed its own modular platform for electric cars — does not believe it can make the small BEV profitable for a few years, according to people close to the company, and will not release a new model merely to gain market share.
The German carmaker has already received 40,000 orders for its ID.3, the most basic version of which retails for about €35,000.
The car became the best-selling fully electric vehicle in Europe in October, overtaking rivals from Renault and Tesla, largely because of strong demand in Norway, Germany and the Netherlands, according to research by Berlin-based car analyst Matthias Schmidt.
However VW is still far behind its rivals when it comes to total battery vehicle sales in Europe, and the group is likely to be forced to pay fines for marginally missing strict EU emissions targets for 2020.
Volkswagen, which under chief executive Herbert Diess has been committed to overtaking Elon Musk’s Tesla, has a number of electric launches lined up over the next few years, including its first dedicated electric SUV, the ID.4, which will be sold in Europe, Asia and the US, and the ID.5 coupe.
The company will also update its beloved camper van, known as the “Bulli”, with the fully electric ID.Buzz in 2022.
VW group, which includes brands such as Audi, Porsche and Skoda, plans to sell 3m electric cars a year by 2025 as it races to comply with ever-stricter emissions regulations in the EU and elsewhere.
Brussels is considering tightening its CO2 reduction target for 2030 from 40 per cent to at least 55 per cent — a move that has been criticised by German car lobby the VDA.
However, Mr Diess said tougher targets could present VW with an opportunity. If the new EU measures are introduced, the Volkswagen brand would have to produce 300,000 more electric vehicles a year from 2030 — roughly equivalent to the entire annual output from large plants in Zwickau and Emden, Germany, according to people close to the company.