German automaker Volkswagen VWAGY on Tuesday revealed that the company has been working on developing electric vehicles priced at around 20,000 euros ($21,702), the world premiere of which is scheduled for 2027.
What Happened: "The future is electric. In order for electromobility to become widespread, attractive vehicles are needed, especially in the entry-level segment,” CEO of the Volkswagen brand Thomas Schäfer said in a statement, while adding that the ambition requires political support and competitive framework conditions.
The company did not divulge much about the upcoming vehicles besides that it will set standards in the entry-level segment in terms of technology, design, quality, and customer experience. However, the attempt is not without difficulties, given the rising cost of energy and raw materials, the company said. The automaker is also eyeing a high degree of localization for the project, thereby shortening the transport route for components and subsequently emissions.
“It’s about entry-level electric mobility from Europe for Europe,” Volkswagen Chief Executive Oliver Blume said. “In doing so, we combine a clear commitment to Europe as an industrial location, a European industrial policy and ultimately act in the interests of European customers.”
Why It Matters: Volkswagen is already looking to unveil cars priced under 25,000 euros by the end of 2025, including two new compact cars, one from Volkswagen and one from CUPRA, as well as two small SUVs, one each from Škoda and one from Volkswagen.
The high starting price of EVs as compared to combustion engine vehicles, particularly in Western EV markets, has been hindering large-scale EV adoption. U.S. EV makers Tesla and Rivian are also working on lower-priced models in order to expand their total addressable market.
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