Germany's Volkswagen is reportedly in early-stage discussions with potential partners, including France's Renault, to collaborate on the development of a 20,000-euro ($21,476) electric car, according to sources familiar with the matter, as reported by Handelsblatt on Friday.
Volkswagen's interest lies in jointly creating a platform for the electric vehicle, aiming to make battery-powered cars more accessible to a broader market. Talks with Renault are said to be in the preliminary stages, and their outcome remains uncertain, as per the sources.
The envisioned target for annual production is set between 200,000 to 250,000 vehicles, with both companies actively exploring the possibility of collaboration. Volkswagen, however, declined to comment on the report.
A Renault spokesperson acknowledged ongoing discussions, emphasizing the necessity of cooperation to stay competitive in the small-entry electric vehicle segment. The spokesperson added that while various talks are underway, nothing has been finalized.
In response to growing competition from Tesla and affordable Chinese electric models, European carmakers are intensifying efforts to bring more cost-effective electric vehicles to the market. According to autos research firm JATO Dynamics, the average retail price of an electric vehicle in Europe in the first half of 2023 exceeded 65,000 euros, contrasting with just over 31,000 euros in China.
Renault recently unveiled the Legend, a new electric Twingo priced at less than 20,000 euros, emphasizing its commitment to democratizing the electric vehicle market. In March, Volkswagen outlined its plans for an all-electric vehicle under development for 25,000 euros, with a parallel effort to create a 20,000-euro vehicle, although details were not disclosed.
Volkswagen CEO Oliver Blume indicated last month that a final decision on producing the affordable electric car had not been made. However, he expressed confidence that the company could reach a decision by the second half of the decade.