Volkswagen’s forthcoming small electric vehicle, anticipated to be priced around €20,000, will not have a corresponding model from its sister brand Skoda, according to company sources. Skoda has reportedly decided against producing a version of the compact electric car, citing concerns over potential financial losses.
Volkswagen is set to unveil a prototype of its budget-friendly electric car on March 5. Unlike its predecessor, the e-Up!, which had variants from Skoda (Citigo e iV) and Seat (Mii electric), the new model will be exclusive to the Volkswagen brand. Production is slated for Volkswagen’s plant in Palmela, Portugal, which is currently being adapted for electric vehicle manufacturing.
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A Skoda spokesperson stated that the Fabia, priced below €20,000, will continue as the brand’s entry-level model and will remain in production beyond 2030. The spokesperson added that while Skoda plans to expand its electric vehicle lineup, it will not participate in the €20,000 electric car project.
Financial considerations appear to be a significant factor in Skoda’s decision. Reports suggest that Volkswagen incurred a loss of approximately €10,000 per unit on the e-Up! For the upcoming model, Volkswagen projects a marginal profit of a few hundred euros per vehicle, a margin deemed insufficient by Skoda’s management.
Initially, Volkswagen explored a collaboration with Renault to co-develop the small electric car using Renault’s platform to reduce costs and expedite market entry. However, these discussions did not progress, partly due to internal opposition favoring the use of Volkswagen’s own production facilities.
To advance the development of the new electric model, expected to launch in 2027, Volkswagen will leverage its partnership with U.S. electric vehicle manufacturer Rivian. The collaboration aims to implement a new electronics architecture that reduces the number of control units, thereby lowering production costs.
Source: Spiegel