VW eyes India to produce sub-20,000 euro EV

HAMBURG -- Volkswagen and Skoda are working on a plan to localize a small electric car in India as part of the wider program within the VW Group to produce an EV that costs less than 20,000 euros ($21,500).

The India plan is one of four working "streams" currently being overseen within VW's volume brand group to find ways to bring down the cost of an entry small electric car ahead of a planned launch in 2026-27, Thomas Schaefer, head of VW brand, said on the sidelines of the launch of the ID2all small car concept.

VW said it plans to start deliveries of the production ID2 in 2025 with a targeted entry price of less than 25,000 euros. The automaker also aims to undercut that price with the cheaper model, possibly called ID1.

"There is almost an obligation for us to get this right," Schaefer said last week. "That is the real Champions League. We have to make a car that is affordable."

Skoda is leading the Indian side of project as part of its wider role to develop cars for itself and the VW brand for the market on the combustion-engine MQB-A0 platform.

India is emerging as potential production location for cheap EVs. Stellantis has started building an electric version of the Citroen New C3 minicar in India, and Renault may build an EV version of the Kwid there, according to media reports. 

Market leader Suzuki is also looking at localization EV production there.

Which platform VW will use for the ID1 has not been decided, but Schaefer said it was unlikely to be a version of the MEB Entry platform underpinning the VW ID2 and three other models, including one each for Skoda and Cupra.

Partnering is a possibility

Working with an outside partner on the platform is one option VW is looking at to bring down costs.

"Either you solve the riddle with scale, or downsize the battery, or you go partnering and scale it even more," Schaefer said. "We have not solved it yet."

The four working groups present their findings on a weekly basis, Schaefer said.

The ID1 name is also undecided.

"There is a debate about that," he added.

One element of the car that has been fixed is the battery chemistry. It "has to be" lithium iron phosphate (LFP)," Schaefer said, referring to the cheaper chemistry that has been popularized for electric cars by Chinese battery companies and automakers.

The ID2 will also use LFP for its lowest-cost variants.

The entry level EV is likely to be built in Europe for European sales, Schaefer said.

The exact location of the factory is not so important in terms of bringing down the cost, VW production head Christian Vollmer said.

"It does not matter where you produce the car, either Germany, Eastern Europe, Southern Europe. What matters is that you spend a maximum 15 hours to build it," he told Automotive News Europe at the same event.

To build that fast VW would need a high level of automation, which reduces the wage bill, he added. Then, the battery and the sourcing of battery materials become the key concerns.

"[At that point] the questions are: How big is the battery? What is the range? What is the supply chain and the CO2 balance of that supply chain, inbound and outbound?" Vollmer said. "Where I produce the car is on page two."