According to the often well-informed German newspaper Handelsblatt, Volkswagen is considering collaborating with Renault to develop and produce the sub-20 000-euro car. Both companies declined to comment on these rumors from sources familiar with the matter.

According to Handelsblatt, VW is talking to potential partners, but Renault is definitely one of them. At the moment, discussions are still in a very early stadium and there’s still a chance that nothing will come out of it.

An answer to the Chinese

The German carmaker is interested in cooperating on a platform for the car that it hopes will make battery-powered vehicles affordable for the masses, Handelsblatt reported. An annual production of 200 000 to 250 000 vehicles is the target for both partners together, according to Handelsblatt.

European carmakers have surely stepped up efforts to bring more affordable electric vehicles to market as they face increased competition from the American EV specialist Tesla but even more so from cheaper Chinese models.

The average retail price of an EV in Europe in the first half of 2023 was over €65 000, according to research firm JATO Dynamics, compared to just over €31 000 in China. The interest of the individual buyer in Europe for EVs seems already to be waning because of the absence of affordable, small EVs.

Joined efforts

Volkswagen has already announced that it will build a small EV, the ID.2, with a list price starting at €25 000. When it made the announcement, it was also said that the company was considering an even smaller and cheaper car, a sort of ID.1 at €20 000.

Volkswagen Group CEO Oliver Blume said last month that the company had not decided to produce the car yet, but he was convinced it could get there by the second half of the decade.

In the last weeks, Renault presented its proposal for a sub-€20 000 car, the new Twingo ‘Legend’, and started its Re-industry plan where it foresees a cut in production cost of 50% for EVs. That probably sounds like heaven for Volkswagen, which seems to be struggling heavily with its costs.

At the presentation of this Re-industry plan, the top managers of Renault were heard saying that cooperation was necessary to be competitive with small-entry electric vehicles. “We are in different discussions, but nothing has been finalized,” said a spokesperson. Volkswagen could probably be one of the potential partners.