FRANKFURT (Reuters) – Volkswagen will develop low-cost electric vehicles to better compete with fierce Chinese rivals, Europe’s largest automaker said on Tuesday after talks with Renault (EPA:) to join forces on a project that failed earlier this month.
The goal is to produce electric vehicles for the European market at a price of about 20,000 euros ($21,746), the company said, adding that a world premiere is planned for 2027.
“We are talking about entry-level electric mobility from Europe to Europe,” said Volkswagen (ETR:) CEO Oliver Blume. “In doing so, we combine a clear commitment to Europe as an industrial region, European industrial policy and, ultimately, acting in the interests of European customers.”
The move comes as Chinese rivals, some of which have a 30 percent cost advantage over their Western counterparts, are racing to Europe to grab market share and attack established automakers on their turf.
Volkswagen said last week that European industry has two to three years to prepare for the competitive threat, warning that the industry’s survival would otherwise be at risk.
Volkswagen brand chief Thomas Schaefer said that despite the low price, the planned entry-level model will set standards in terms of technology, design and quality, adding that this has become more challenging due to higher costs.
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