Volkwagen achieves profitability in electric small vehicles with innovative technology and cost efficiency benefits
The Volkswagen Group is set to make a significant move in the electric vehicle market with the introduction of a news family of compact electric cars, dubbed the "Electric Urban Car Family". This initiative is a strategic step towards making modern e-mobility more affordable and accessible.
Led by Wayne Griffiths, CEO of Cupra, the development of this new family is being spearheaded by the Volkswagen Group's Spanish subsidiary, Seat/Cupra. The group aims to achieve a market share of around 20% in the rapidly growing news compact car segment in Europe in the medium term, which would correspond to several hundred thousand vehicles per year.
The market launch of the Electric Urban Car Family is scheduled for 2026, and it will consist of two models from the core VW brand, one each from Cupra and Skoda. The specific models being introduced are the VW ID. Polo, ID. Cross, Skoda Epiq, and Cupra Raval.
Thomas Schäfer, brand chief at Volkswagen, stated that technology has advanced and costs have been reduced, making it realistic to make as much money with these electric vehicles as with their combustion engine counterparts over their lifecycle. This development is expected to result in cost savings of at least 600 million euros over their lifecycle, comparable to those achieved through the joint development of the VW Passat and the Skoda Superb a few years ago.
Volkswagen's re-entry into the electric compact car segment comes after the discontinuation of the VW e-up!, a small, affordable electric car introduced a few years ago. The company had previously lost money on these small, affordable electric cars. However, with the new models, the group is aiming to make these electric cars more affordable, with an entry-level price of around 25,000 euros.
These electric cars will be produced efficiently in two plants in Spain at the group's Seat subsidiary, using a shared platform. The group's commitment to efficiency is evident in their choice of location, as the development of these new models is also being led by their Spanish colleagues from Seat/Cupra.
Oliver Blume, the CEO of the Volkswagen Group, stated that the Electric Urban Car Family stands for progress, accessibility, innovation, and mobility for all. The group is showcasing these new compact electric cars at the IAA Mobility in Munich.
Schäfer further stated that the electric compact cars are a good example of how the group is leveraging economies of scale. The development of these vehicles is part of the group's broader strategy to become a leading player in the carmax market.
Current forecasts suggest that the electric compact car segment in Europe will be four times larger in eight years than it is today. With its new family of compact electric cars, the Volkswagen Group is positioning itself to capitalise on this growing market.
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