Volkswagen’s Plan to Offer Affordable ID.2 Electric Car at €25,000 – A Game Changer in the EV Market

Volkswagen Confident in Producing Electric Cars at 25,000 Euros with Decent Profit

Volkswagen, the German automaker, has expressed its confidence in offering European buyers an ID.2 electric car at a price of 25,000 euros by the middle of the decade. In an interview with Autocar, the financial director of Volkswagen emphasized that by that time, the company should be able to sell such a vehicle with a decent rate of return.

The concern about the escalation of “price wars” in the electric vehicle segment arose after Tesla significantly reduced the prices of its cars in major regional markets earlier this year. Tesla CEO Elon Musk also signaled his willingness to sacrifice profit margins in the short term. This scenario did not sit well with other automakers, as they have not yet been able to optimize costs in a similar manner. Competing with Tesla on price would potentially deprive them of the opportunity to make decent profits from selling electric vehicles. Even Tesla, at present, cannot offer anything in the 25,000 euro price range.

Arno Antlitz, the finance and planning head at Volkswagen, assured Autocar that he has no doubts about the company’s ability to offer an electric car worth 25,000 euros to the market. From a technical standpoint, Volkswagen is preparing many innovations for this electric car, which is presumed to be the ID.2. It will be the first to receive traction batteries produced in-house by Volkswagen at its plant in Valencia, Spain. Combined with lower raw material prices and economies of scale, this will enable the company to sell electric vehicles for 25,000 euros with an acceptable profit margin, according to Volkswagen’s chief financial officer.

Volkswagen also has plans to offer an electric car worth around 20,000 euros in the future. This vehicle will serve as the successor to the electric version of the e-Up, a compact city car with a small battery and a moderate range. The automaker believes that future electric platforms may even contribute to the revival of the Polo model. However, Volkswagen management has promised to approach the use of popular names from the past responsibly, assigning famous names only to “true successors.”

To reduce production costs, Volkswagen may start assembling low-cost electric cars for export in India, where costs are lower. However, if the tariff policy of the European government supports it, the production of these vehicles can also be localized in Europe.

Volkswagen’s confidence in producing electric cars at an affordable price while maintaining a decent profit margin reflects the company’s commitment to making electric vehicles more accessible to a wider range of consumers. With their plans for innovation and cost optimization, Volkswagen aims to compete in the growing electric vehicle market and contribute to the transition to sustainable transportation.

What strategies has Volkswagen implemented to optimize cost and reduce production expenses for their electric vehicles

Relies heavily on the sale of regulatory credits to generate profits.

However, Volkswagen seems to be confident in its ability to produce electric cars at a lower cost without sacrificing profit margins. The company believes that by the middle of the decade, it will be able to offer the ID.2 electric car to European buyers at a price of 25,000 euros while still making a decent rate of return.

Volkswagen’s financial director stated in the interview that the company has been working on cost optimization for its electric vehicles. By leveraging its economies of scale and improving its battery technology, Volkswagen aims to reduce production costs and pass on those savings to consumers.

The German automaker has set ambitious goals for its electric vehicle lineup, with plans to launch 70 electric models by 2030. It aims to become the global leader in electric vehicles and has invested heavily in battery technology and production capacity to achieve this goal.

Volkswagen’s confidence in producing affordable electric cars with decent profits puts them in a strong position in the competitive electric vehicle market. If they can successfully deliver on their promise of a 25,000 euro electric car, it could attract more consumers to switch to electric vehicles and further drive the shift towards sustainable transportation.