18 July 2019
German auto giant Volkswagen is expected to discuss electric car plans at a supervisory board meeting next week. Photo: Reuters
German auto giant Volkswagen is expected to discuss electric car plans at a supervisory board meeting next week. Photo: Reuters

VW plans electric Tesla rival priced under US$23,000: report

Volkswagen intends to sell electric cars for less than 20,000 euros (US$22,836) and protect German jobs by converting three factories to make Tesla rivals, according to Reuters.

Plans for VW’s electric car, known as “MEB entry” and with a production volume of 200,000 vehicles, are due to be discussed at a supervisory board meeting on Nov. 16, the report said, citing a source familiar with the matter.

Another vehicle, the I.D. Aero, will be built in a plant currently making the VW Passat, a mid-sized sedan, the source was quoted as saying.

The German firm, meanwhile, is also expected to discuss far-reaching alliances with battery cell manufacturer SK Innovation and US automaker Ford.

The November 16 strategy meeting will discuss Volkswagen’s transformation plan to shift from being Europe’s largest maker of combustion engine vehicles into a mass producer of electric cars, another source familiar with the deliberations told Reuters.

VW’s strategy shift comes as cities start to ban diesel engine vehicles, forcing carmakers to think of new ways to safeguard 600,000 German industrial jobs, of which 436,000 are at car companies and their suppliers.

An electric van, the ID Buzz, is due to be built at VW’s plant in Hannover, where its T6 Van is made, according to the report.

To free up production capacity for electric cars in Hannover, VW’s transporter vans could be produced at a Ford plant in Turkey, if German labor unions, who hold half the seats on VW’s board of directors, agree.

VW and Ford are in “exploratory talks” about an alliance to develop self-driving and electric vehicles and to complement each other’s global production and sales footprints, Reuters reported last month.

Ford has strong sales and profits in the United States thanks to its exposure to the lucrative pickup truck segment, while Volkswagen dominates the market for passenger cars in Europe.

The companies are considering cooperation deals in the areas of commercial, electric and autonomous vehicles, although a final agreement is unlikely to be announced at the November 16 strategy meeting at Volkswagen, Reuters cited one of its sources as saying.

The details of a cooperation deal with Ford may take until the end of the year to be finalized.

VW will mainly focus on debating the merits of converting its factories in Emden, Zwickau and Hanover, which all build combustion-engined cars, to electric ones under the plans being discussed by the board of directors, according to the report.

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