AutosVolkswagen seeks allies for budget electric cars: is France the direction?

Volkswagen seeks allies for budget electric cars: is France the direction?

Volkswagen ID.7
Volkswagen ID.7
Images source: © Autokult | Mateusz Lubczański
10:24 AM EST, December 11, 2023

With the rising strength of Chinese competitors, European giants like Volkswagen are starting to look further afield in search of new alliances. This includes exploring partnerships within their closest competition.

In 2023, Chinese car manufacturers made a significant push into the European market. Several Chinese brands emerged on the European scene and those already present have gained substantial popularity over recent years. Their cars have even begun to regularly feature in the monthly rankings of the most popular cars in Europe.

With their low pricing, primarily due to subsidies from the Chinese government, electric cars from China pose a formidable challenge to European models. The exact impact of these subsidies on sales is currently under investigation by the European Union. According to leading figures in the European automotive industry, the quality of models produced by Chinese manufacturers closely matches their standards.

For now, European manufacturers retain an advantage due to unfamiliarity with the new products and brand loyalty among their customers. However, if price disparities widen and Europeans grow more comfortable with Chinese brands, the landscape could significantly shift - a trend that appears to be subtly taking shape. This underlines why European giants are currently exploring new strategies for cost reduction, with the aim of manufacturing cheaper electric cars.

"Automotive News Europe" reports, citing the German newspaper "Handelsblatt", that Volkswagen is presently in negotiation with potential partners. The goal is a cooperative effort that would result in an electric car priced around 20,000 euros, or approximately $24,000.

German-French Merger? Discussions are in progress

"Handelsblatt" suggests that Volkswagen is currently negotiating with various entities, among them, Renault. An electric "people's car" with a French touch would present an intriguing combination. However, this German paper tempers potential enthusiasm by noting that discussions are still in their early stages and could potentially fall through.

Renault's experience in creating affordable electric cars is undoubtedly a valuable asset. By 2026, they plan to launch a new Twingo that costs less than 20,000 euros. French expertise could turn out to be highly persuasive for Volkswagen. Insider information suggests that a potential collaborative product would have an annual output of 200,000 to 250,000 units.

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