VW and Renault could be teaming up to make one of the cheapest EVs so far

(Image credit: Volkswagen)

Volkswagen has been courting a number of potential partners with a view to collaborating on and co-creating an electric vehicle that will cost under €20,000 (around $17,000 / $21,500 / AUS$32,850) when it goes on sale in Europe, according to Germany's Handelsblatt newspaper (via Reuters).

Handelsblatt reported that VW's talks have included Renault, although nothing has been set in stone. "We are in different discussions but nothing has been finalized," a Renault spokesperson told the paper.

In the same report, the source stated that cooperation was necessary with small, entry-level electric vehicles. 

The timing looks perfect, seeing as Renault CEO, Luca De Meo, recently fronted the company’s Capital Markets Day, which sought to drum up investment for the French automaker’s new Ampere electric vehicle and technology subsidiary.

At the event, De Leo announced the return of the Twingo badge, which would signify Renault’s entry into the affordable, small EV space, with a price tag also slated at around the €20,000 mark.


(Image credit: Volkswagen)

The push comes from Renault and Volkswagen, both major players in the European car market, as the pair look to step up their electric vehicle offering. Unfortunately, there is currently a lack of more 'affordable' options, with price being one of the biggest barriers to entry.

The average retail price of an EV in Europe in the first half of 2023 was over €65,000 (around $70,000 / £56,00 / AUS$107,000), according to autos research firm JATO Dynamics, compared to just over €31,000 in China ($33,500 / £26,500 / $51,000).

It is this impending threat from China that is prompting European 'legacy' automakers to up their EV game, with cooperation likely being the only viable solution to drive down the cost thanks to economies of scale. 

Currently, Volkswagen’s most affordable option is the Golf-sized ID.3, which still costs around £40,000 in the UK (€47,000 / $50,000 / AUS$77,000). However, it announced earlier this year that it is working on an ID.2all concept, which is similar in size to the Polo, but will offer a 450km (280-mille) range and cost less than €25,000 (around $27,000 /£21,000 / AUS$41,000).

A collaboration with a company like Renault would introduce an even smaller model to fill the gap the former VW e-up! once filled, just with improved battery tech for a more useable real world range. 

Analysis: Affordable EVs will be the next battlefield

Renault Twingo Concept

(Image credit: Renault)

Bar a few whacky, leftfield electric options (we are looking at you Citroen Ami and Renault Twizy), most manufacturers have played it safe with their debut EV options. 

This has largely manifested itself in fairly bulbous, battery-packed SUVs or crossovers – the most popular automotive segment and therefore the easiest to appeal to.

But as we move into the next phase of EV adoption, particularly in Europe where larger cars aren’t necessarily the most popular, customers are increasingly seeking more affordable, smaller options that can fit into everyday life and not cost as much as premium internal combustion engine models would have been a few years ago.

Elon Musk has already hinted that his company is working on cheaper, €25,000 electric vehicle that would sit beneath its current Model 3. The fact it is set to be built in the firm’s Berlin Gigafactory indicates this is very much part of its future European offensive.

What’s more, a handful of Chinese brands will begin offering new models in Europe and beyond next year. This includes Chery’s Omoda brand, Always, BYD and HiPhi, all of which offer Chinese models that seriously undercut those EVs from European and US brands.

The threat from Asia is so real, European Commission president, Ursula von der Leyen, launched an anti-subsidy investigation against Chinese imports of electric vehicles in September this year, fearing that if left unchecked, Chinese companies will dominate the European market over the next few years. 

"Global markets are now flooded with cheaper Chinese electric cars and their price is kept artificially low by huge state subsidies," said von der Leyen in her annual State of the Union address. "This is distorting our market."

Although potentially good news for the consumer, who will begin to enjoy cheaper EVs, it could prove seriously harmful for those automakers that have been slow to adopt electrification. 

You might also like

Leon Poultney

Leon has been navigating a world where automotive and tech collide for almost 20 years, reporting on everything from in-car entertainment to robotised manufacturing plants. Currently, EVs are the focus of his attentions, but give it a few years and it will be electric vertical take-off and landing craft. Outside of work hours, he can be found tinkering with distinctly analogue motorcycles, because electric motors are no replacement for an old Honda inline four.