Volkswagen to go solo on affordable EVs after ending talks with Renault

Volkswagen has ended talks with Renault to launch an affordable EV, according to sources. However, a low-cost Volkswagen electric car is still in the plans.

A report from Germany’s Handelsblatt last December hinted at a partnership between Volkswagen and Renault to build an EV under 20,000 euros ($21,500).

The report noted that talks were still in a “very early stage,” but a Renault spokesperson explained that partnering would be necessary to stay competitive. “We are in different discussions, but nothing has been finalized,” the source said.

Renault announced plans to launch the Twingo e-Tech successor, the Legend, last November. The entry-level EV is expected to start at around 20,000 euros ($21,500).

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Despite Renault confirming it was in “good discussions” with Volkswagen to build an affordable EV in February, it looks like the automakers may go their separate ways.

According to sources familiar with the matter, VW is walking away from the partnership. A new Reuters report claims Volkswagen has ended talks with Renault to build a low-cost electric version of its Twingo.

Volkswagen and Renault go solo on affordable EVs

Renault plans to continue developing the Twingo EV, which is set to launch in 2026. A VW spokesperson said the company is still looking at options for affordable EVs but declined to comment on the partnership.

The automakers failed to “succeed in finding an agreement,” according to one of the sources. Another source said the two had been very close, but VW walked away after deciding to develop its own affordable electric car.

Renault will continue to build the electric Twingo without VW, a source said but is open to partnering.

Volkswagen sources said a decision on its EV plan is expected within weeks. Meanwhile, VW brand CEO Thomas Shafer confirmed he wants to launch a low-price EV by 2027.

Volkswagen revealed its entry-level EV, the ID 2all, last March. The electric car is “Spacious like a Golf” and “Affordable like a Polo,” according to VW.

The VW ID 2all is expected to start under $27,000 (€25,000). Based on a new entry-level MEB platform, the low-cost EV is expected to get up to 279 miles (450 km) range. Shafer said the ID 2all shows “where we want to take the brand.”

Volkswagen is also reportedly working on an even lower-cost 20,000 euro ($21,700) EV called the ID 1. It will likely pull parts from the ID 2all with smaller (38 or 58 kWh) battery options.

Electrek’s Take

Although the break-up could be a major setback as European automakers look to fend off incoming Chinese rivals like BYD, it doesn’t sound like affordable EVs are off the table.

Volkswagen and Renault are both expected to continue developing low-cost EVs independently, which could help build supply chains for the future. However, they better get moving.

BYD is rapidly expanding after declaring a “liberation battle” against ICE vehicles earlier this year. Its cheapest EV in China, the Seagull, now starts at $9,700 (69,800 yuan).

And BYD isn’t the only one targeting the affordable EV market. Ford, Kia, and several others have all revealed plans to launch low-cost electric models.

Will Volkswagen succeed on its own? Time will tell. Let us know your thoughts in the comments below.