FRANKFURT -- Volkswagen Group is reconsidering which of its brands will develop a new family of small electric cars after its Spanish unit, Seat, lost the project.
VW Group CEO Herbert Diess said in March 2019 that Seat would lead development of full-electric city cars that will cost less than 20,000 euros. Diess said they would replace the full-electric versions of the VW Up, Skoda Citigo and Seat Mii and would be "a great step toward an even more affordable electric mobility."
One source close to Seat said the VW brand will now head the project. Executives at VW Group's headquarters in Wolfsburg believe that this will be "more efficient in terms of synergies," the source said.
The small EVs will be based on a heavily modified version of VW Group's MEB electric-car architecture shortened to less than 4000mm (157.5 inches), roughly the length of the VW Polo.
MEB underpins the VW ID3, a compact hatchback due to launch this summer in Europe as the first of the automaker's new generation of battery-powered cars for the mass market.
Adapting the architecture for small city cars family in a cost-efficient way is proving to be challenging because of the need to strip out a third of the costs compared with the ID3. Engineers have looked at everything from smaller electric motors to different battery module configurations to give the small EVs the high standard of crash protection that will be expected by customers.
Seat's winning of engineering responsibility for the MEB Entry family was a coup for the once struggling Spanish automaker. It demonstrated VW Group's confidence in CEO Luca de Meo who delivered profits after his 2015 appointment as head of the brand. De Meo has since quit VW Group and will take up the post of Renault CEO on July 1.