Volkswagen 'ditches affordable electric car plans' after fierce competition from China

VOLKSWAGEN has backed out of its plans to create an affordable electric car with another automaker, according to reports.

The German automaker was in talks with Renault to build an affordable version of the Twingo electric vehicle.

The German automobile maker was in talks to produce a cheaper electric vehicleCredit: GettyVolkswagen and Renault were reportedly close to a deal before the German-based company walked awayCredit: Getty

The two companies reportedly "did not succeed in finding an agreement," a source told Reuters.

A second insider claimed that the pair were very close to signing an agreement but it fell to shambles when Volkswagen declared its intention to develop the car on its own.

Had the deal been signed, the energy-efficient car would have hit the market in 2026.

However, sources within Volkswagen — who refused to be named due to the confidentiality of the talks — stated that CEO Thomas Schaefer is still pushing for the electric car and would like to launch a lower-priced version by 2027.

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The U.S. Sun contacted Ampere, which oversees Renault's electric vehicle program, for comment.

“We are currently examining various options to expand our product portfolio in the area of even more affordable fully electric entry-level mobility,” Pietro Zollino, Volkswagen’s head of corporate communication, told The U.S. Sun.

Volkswagen's departure from the talks was reportedly a massive blow to Renault CEO Luca de Meo, who hoped for a greater sense of camaraderie between European and Chinese carmakers.

Pressure from Chinese automakers, which currently corner the market in electric vehicle production, has forced European carmakers to speed up timelines and cut costs in their efforts to produce an affordable vehicle.

As of now, European automakers are looking to create a vehicle that would cost potential buyers less than $21,686.

Renault's EV Twingo is set to make its debut in 2026 after the company axed its latest gas-based car in 2019.

At the time, de Meo called the Twingo EV " a game changer" as well as a "silver bullet for sustainable mobility."  

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So far, Twingo has gone through three models with the EV set to be its fourth.

De Meo added, "This is a fit-for-purpose urban vehicle, state-of-the-art EV without compromise."

Why aren't people buying EVs?

As January, many EV makers reported slow demand. Rueters said there are a few valid reasons for a slow in demand:

High initial costs. Many automakers, like Tesla, Hyundai, and Ford have conducted "price slashes" on their flagship EVs to attract new buyers, though demand remains slow.
Higher insurance costs. Some insurance companies cite fire risks, high costs of battery replacement, and higher vehicle weight as reasons for higher premiums.
Charging anxiety. A large percentage of people remain fearful of being in a situation where they won't be able to charge if they run out of battery due to a lack of infrastructure.
Range anxiety. In many instances, EVs still don't have the range and infrastructure of gas-powered vehicles.
Poor performance in extreme temperatures. Reduced range in extremely hot or cold weather makes potential buyers wary.

Source: Reuters

“In the true spirit of Renault, Ampere is engineered to make electric and connected cars affordable for all, addressing the imperatives of energy transition and seizing the growth opportunities on the market," the CEO proclaimed.

“Ampere is first about striving for technological excellence and customer experience: two EV-native platforms, a powerful line-up of seven cars, a new generation of centralized electronic architecture, an advanced Android-based software suite."

He later added that his cars have "the most compact and efficient supply and manufacturing EV ecosystem, all created in Europe.”

Volkswagen's full statement

Volkswagen's head of coporate communications Pietro Zollino gave the U.S Sun a lengthy statement.

•    Individual mobility for everyone is a central demand that has always been routed in our Volkswagen brand.
•    With affordable e-models around 25,000 euros ($27,185.50) we will offer an attractive range from 2026, initially with four vehicles from the VW, Skoda and Cupra brands.
•    We are currently examining various options to expand our product portfolio in the area of even more affordable fully electric entry-level mobility.
•    An important criterion is economic feasibility, and all possible scenarios are carefully evaluated before a possible expansion of the product portfolio.
•    However, no decision has been made yet.
•    We will inform you in due course. Until then, please understand that we will not further comment.

“I’m more than confident that the success of Ampere relies on the expertise and enthusiasm of a highly diverse team that has proven extremely effective in the last two years of preparation," he continued.

“With high-performance cars, competitive prices, a strong brand and high-quality services, Ampere is well positioned to catch the growth on the European EV market.”

So far, Twingo has gone through three models with the EV set to be its fourthCredit: handoutVolkswagen CEO Thomas Schaefer is still pushing for the electric car and would like to launch a lower-priced version by 2027Credit: GettyAs of now, European automakers are looking to create a vehicle that would cost potential buyers less than $21,686Credit: Getty

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