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Volkswagen Group launches project for €20,000 entry-level EV in Europe

The Volkswagen Group plans to introduce €20,000 entry-level EVs in Europe, with the world premiere planned for 2027.

Volkswagen has been working for some time to offer compact, particularly inexpensive electric vehicles in the price range of around 20,000 euros. In this way, the Group's volume brands are fulfilling their promise to create mobility for all and continue to facilitate the entry into e-mobility.

Volkswagen for this project is going to rely on a high degree of localization in Europe, which in turn benefits Europe as an industrial location.

Work is already underway on the “Electric Urban Car Family”, with which the Brand Group Core will present electric cars for under €25,000 as early as the end of 2025.

Two new compact cars, one from VW and one from CUPRA, as well as two small SUVs, one each from Škoda and one from VW, are planned here. All four vehicles will be built in Spain. With the project on all-electric entry-level mobility for €20,000, the Volkswagen Group is now taking the next, consistent step, it said.



This will test the market to see whether there's a price sensitivity,
people will tell you if you cut the price of electric cars you will sell many more,
that remains to be seen


2027 is too late, BYD Seagull is available now in Europe. MG4 and GWM ORA are for sale here in Australia for that money.


In China the prices are lower and they sell over a million per month. Does that not qualify as many more?

Back in 2021 the street price of the Chevy Bolt was in the $21-25k range but GM scared potential customers away with an MSRP north of $37k. I picked one up for the wife at $21k. I said then if they cut the MSRP they could sell more at a higher price. Eventually they did cut the MSRP by over $10k and they started selling more and the street price went up..

Roger Pham

`If VW is serious about a $22k (= 20k Euro) entry level EV, then look no further than the Jetta, listed in the USA for $22k. To make this into a PHEV of comparable price, reduce the engine to 1/2 and use the cost saving to provide a 13-kWh battery pack, replace the transmission with e-motors for about the same voila, a Jetta PHEV for the price of the gas-only Jetta.

The Jetta has a 1.5-liter 4-cylinder turbocharged engine producing 158 hp and a transmission. The engine likely costs $8k to $9k, but can be replaced by a two-cylinder 750-cc motorcycle engine with 75-hp. The transmission will be removed and replaced with a 120-hp e-motor, and the engine will have a 75-hp starter-motor-generator but also can be directly clutched to the drive axle in ratio equivalent to mid-range gear ratio so that its maximum rpm will correspond to the car's topspeed, to supplement power to the e-motor, for top-speed power of 120 hp + 75 hp =195 hp. During cruise at 1/2 of top speed, the directly-clutched engine can supply about 50% of its max power, which would be 40 hp + 120 hp from the e-motor = 160 hp total.

For equivalence to high-gear cruise, the engine will be unclutched and just powering the generator to supply electricity to drive the e-motor. However, when you floor the gas pedal, the engine will be clutched to the axle and the e-generator will also act as a motor to provide more power. If battery can supply enough power to both the 120-hp motor and 75-hp generator-motor and with additional 40 hp from the engine at cruise at 1/2 of max speed, you will get a total power of 120 + 75 + 40 = 235 hp total burst power for a very brisk acceleration, which will make this PHEV Jetta a pretty HOT entry-level car for a PHEV that will sell at comparable price to the gas-only Jetta at ~20k Euro, yet can provide over 40-mi of electric-only range for daily commuting. Something to consider, ain't it?


Gas bag China is not America I think you know that



The folks over on Quora Maintain that mass produced ICEs typically have a manufacturers cost in the range of 2-4k $ per with about half of that being material cost. By cutting the engine size in half you’re going to save at most half the material cost. The investment in the manufacturing plant is inescapable and SG&A costs generally would not be impacted much by using a smaller engine.

I assume your batteries are LFP because of the higher tolerance for thermal runaway and lower cost. With smaller capacity battery packs typically a smaller percentage is available as more is held in reserve to avoid deep cycling. You might want to consider a pack in the15-20 kWh range. The extra AER makes for a more attractive product.

Roger Pham

The Honda CB500 with 500cc-2-cylinder engine costs exactly 1/2 as much as the CB1000 with 1,000cc 4-cylinder engine. The DLE 130 engine has 2-cylinder and 130cc cost exactly 1/2 as much as the DLE 222 engine 4-cylinder 222cc.
With twice the cylinder count, it takes twice as much labor and material to make the bigger engine. Common sense, backed by real-life data.

LFP battery can be charged to full each time without reducing the lifespan, so we can use a smaller LFP pack in comparison to a ternary Li-ion pack. 13-15 kWh is the sweet spot for most people, and perhaps the makers will allow for various trims with various sizes of battery packs to suit the customers daily driving distances.


Roger, you are comparing a luxury 1000cc motorcycle sold to affluent western consumers with a utility bike available in almost every country in the world. The fact that one sells for twice the amount of the other has very little to do with raw material costs. 500cc bikes are available for 1/3 the US price in countries like India.


So we are in agreement that the cost savings would be about half the OEM’s material cost or about $500-1,000?


I think the sweet spot is better defined in miles of AER rather than in kWh. For the second rendition of the Chevy Volt GM used real world data from US drivers to determine the sweet spot. It was not the 35-40 miles they originally thought but rather 55-60 miles. The average miles driven was less meaningful than median miles and median was less useful than the full distribution curve. The efficiency of the vehicle will determine the battery capacity required to achieve your target AER. The updated Volt had an 18.4 kWh battery.

Roger Pham

@Bernard & Gasbag,
I'm still waiting for real-word data that support the assertions from both of you about the relative and actual costs of 2-cyl vs 4-cyl engines having cylinders of comparable sizes. If you have the data, please show them now...or forever hold your peace...ha ha ha...

And while we are discussing how VW can actually produce the Jetta PHEV for 20k Euro, or $22k USD, ...
BYD have already released the Seal PHEV starting at $13k USD in China, for the 10.8 kWh battery version capable of AER of 80 km = 50 mi. This seems incredible for 10.8 kWh to go 50 mile, but remember that LFP battery can be charged to full each time without harming cycle life.
There another version of the Seal PHEV with 17 kWh battery pack capable of 120 km = 75 miles that sells for $19k USD in China, the latter has bigger e-motor and capable of faster acceleration.

So, hurry up and get to work, VW, Tesla, GM, Toyota, Honda, Ford, ...etc...You guys are a having a lot of catching up to do. Even with Biden's 100% tariff on Chinese EVs, the Seal PHEV 10.8 kWh 50-mi AER version would only cost $26k USD in the USA and would still be the CHEAPEST PHEV of the land, and would still handily beat out the Toyota Prius Prime listed at $34k USD. INCREDIBLE! Biden may just have to increase Chinese EV tariff to 150%...


Roger, it's your assertion, why should others do the research for you? So far you've linked a hobby shop and compared two motorcycles that aren't directly comparable. Please provide proof of your assertion that a four cylinder powertrain costs twice as much to produce as a two cylinder powertrain, even though both require the same fuel system, ECU, emission controls, machining time, certification, etc.
If you want to know the real cost of a range extender, why not look at what BMW was charging for their "REX" on the i3? Surely that's a more relevant number than the cost of a model airplane engine?

You should also know that cars in general are cheaper in China, as are many other things. They may well be more expensive when looking at affordability, but they are cheaper by the metric of exchange rates. There are dozens of models available in China and in the US, so why not compare those instead of a hypothetical model that isn't sold in both markets?

Roger Pham

Hi Bernard,
The bigger take home point is that in China, the midsize gas only sedan, the Chery Arrizo 8 costs $15k USD, while the BYD Seal PHEV only costs $13k . So, PHEV can. be made at cost parity to gas only ICEV.

Roger Pham

In the last 20 years, the costs of battery and e-motor have come down drastically...while the cost of engine and transmission have gone up, due to increasingly-stringent emission and efficiency regulation. Engines now are needing direct injection and sometimes, dual injection, variable timing for both exhaust and intake, turbocharging...and more costly exhaust emission control system. Transmissions now have typically 6-10 speeds, more complicated than the 4-speed tranny of the early 2000's.

With the above info in mind, if we take a current ICEV and replace with a smaller and simpler engine, since for PHEV duty cycle, the engine-out emission is 1/10 that of the ICEV duty cycle. Cold-start, idling, and rapid acceleration cause the majority of engine-out emission, and in a PHEV, the engine is used mainly for long trips, thus very few cold starts, no idling, and no rapid acceleration but rather it runs at steady most efficient speeds nearly all the times So, an engine and emission-control system dedicated for a PHEV can be simpler and cheaper to produce, and turbocharger is not necessary due to the power boost from the e-motors.
The pair of e-motors such as the smaller starter-generator-motor connected to the engine and a second bigger e-motor can now be produced at lesser cost than that of a 6-10-speed transmission.

So, with much cheaper battery and e-motors, and more expensive engine and transmission, BYD has demonstrated that a PHEV can now be produced at price parity with a comparable ICEV, if not lower. I rest my case.


@Roger, yet again you are comparing two different models!
Here's a better comparison: the VW Jetta starts at US $10,000 equivalent in China and US $21,000 in the US.
No doubt the base Chinese version has fewer features and add-ons, and it doesn't comply to the same local safety and emissions regulations, but it's still a 100% difference to sell the same car in different markets. That's why you can't directly compare US and Chinese prices.

Roger Pham

Too bad, BYD stopped production of gas only cars in 2022 so we have no direct comparison, but the Chery Arrizo 8 midsize sedan for the Chinese market starting at $15k USD is quite comparable to the BYD Seal 06 DM-i PHEV starting at $13k.

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