VW unveils budget EV to win over Europe’s squeezed consumers
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German car manufacturer Volkswagen presents the new electric vehicle IDEvery1 in Duesseldorf, Germany, on March 5.
PHOTO: AFP
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GERMANY – Volkswagen AG became a global car giant thanks to the Beetle, an affordable model for the masses.
Now, the German automaker is finally unveiling a budget car for the electric vehicle (EV) age as it tries to catch up with Chinese brands and other rivals with cheaper options.
VW on March 5 presented the compact IDEvery1 concept car that will cost around €20,000 (S$28,800) – its lowest-priced EV yet. The first VW-brand model to use electric architecture jointly developed with Rivian Automotive, it is due to start production in two years at an undecided location in Europe.
The model will offer more than 249km of range and is the “last piece of the puzzle” for VW’s next-generation line-up, said Mr Thomas Schaefer, chief executive of the brand.
European carmakers are struggling to convince consumers to make the switch to EVs, given their higher sticker prices and lingering concern around charging infrastructure.
VW is seeking to regain ground on rivals with its own cheaper EV models after a year when sales slumped.
Like other German manufacturers, VW initially focused its efforts on premium EVs to offset high development and battery costs. Tech enthusiasts and subsidies helped bolster a first wave of EV growth, but demand has stagnated on a dearth of affordable models, rising inflation and high electricity costs.
VW’s tumbling sales were accompanied by a painful restructuring hammered out with unions in 2024, making it “one of the most challenging years of Volkswagen’s history”, Mr Schaefer said at an event in Dusseldorf, Germany.
“After everything we’ve been through, this gives us back our confidence and powerful sense of momentum – and to be frank, that’s exactly what we needed,” he said.
The IDEvery1 will follow VW’s ID2all, which launches next year at a starting price of €25,000.
Independent automotive industry analyst Matthias Schmidt said: “They’re bringing an affordable electric vehicle to the masses that will enable them to compete with Chinese entrants.”
VW’s more affordable models will not be ready in 2025, which means Europe’s biggest automaker has a tighter window to ramp up sales and meet the European Union’s carbon dioxide emissions targets.
And there is no guarantee of financial success, according to UBS analyst Patrick Hummel. “In the past, they struggled to make money with small cars in the combustion era,” Mr Hummel said. “And with EVs, it’s going to be even more challenging.”
The ID2all and the IDEvery1 will be the first VW models to use lithium iron phosphate batteries, which are cheaper, longer lasting and charge more quickly, but are not as resilient to temperature fluctuations.
VW’s foray into EVs was marred by software glitches that culminated in the ousting in 2022 of former CEO Herbert Diess.
His successor Oliver Blume’s efforts to catch up with Tesla were hindered by soaring inflation that put a lid on consumer spending. The arrival of cheaper Chinese brands led by BYD did not help.
The car will compete with budget models already unveiled by rivals, including Renault’s Twingo E-Tech and Citroen’s e-C3 city car, which will both have price tags starting at less than €20,000.
In Singapore, Volkswagen started offering EVs in 2024 with the ID4. At $283,400 with certificate of entitlement before discounts, the mid-sized electric crossover is comparable with the larger BYD models.
VW is seeking to restore its former glory. Until 2022, the Golf was Europe’s top-selling car for 14 years straight. The Golf and affordable Polo have sold more than 57 million units combined since their introduction in the mid-1970s. BLOOMBERG
