VW, Skoda, Cupra will get small EVs made in Spain

HAMBURG, Germany -- Volkswagen Group will build its new range of small electric cars for the VW, Skoda and Cupra brands at two plants in Spain, VW brand CEO Thomas Schaefer said.

The ID2 small hatchback, which VW previewed last week with the debut of the ID2all concept car, will be built at sister brand Seat's Martorell plant alongside the Cupra Urban Rebel, Schaefer said on the sidelines of the concept's unveiling here.

Meanwhile, two small electric SUVs -- one for Skoda and one for VW -- will be made at VW's factory in Pamplona, where it currently builds the Polo.

VW's version will be called ID2X, Automotive News Europe sister publication Automobilwoche has reported.

All four small EV will be underpinned by VW Group's MEB Entry platform.

Schaefer said economies of scale and building the cars in Spain, where wages are relatively low, will help to keep costs down.

Huge boost for Spain

Making the four cars in Spain is part of VW Group's 10 billion euros ($10.6 billion) project in the country. A core component of the project, which includes Seat and nearly 50 partners, is a gigafactory in Valencia, Spain, that will be run by VW Group's battery company, PowerCo.

The 3 billion euro plant is scheduled to start cell production in 2026, VW Group said last Friday.

VW Group's investment is projected to provide a 21 billion euro boost for the Spanish economy by turning the country into a European hub for e-vehicle and battery production.

Spain is Europe's second-largest car producing nation behind Germany.

Less than 25,000 euros

The only model among the four that will cost less than 25,000 euros is the ID2, Schaefer added. The Cupra Urban Rebel will be pitched as a more sporty, upmarket model while the small electric SUVs are expected to command a higher price due to their body style.

In Europe, automaker typically get to charge more for SUVs, for instance, the VW Polo starts at 20,830 euros in Germany while the similar-sized T-Cross starts at 22,450 euros.

All four models will use batteries supplied by the VW Group's planned new cell plants, initially from Salzgitter and then from Valencia, Schaefer said.

The entry models will use lithium iron phosphate (LFP) battery chemistry, which is less expensive than lithium ion, while longer-range versions will use a nickel manganese cobalt (NMC) chemistry, Schaefer said. Both will be supplied by VW. The long-range variants will drive up to 450 km (304 miles) between charges, VW has promised.

Europe's largest automaker is aiming for a fast ramp-up, with all four cars expected to reach the market within one and half years of the initial start of production in 2025, led by the Urban Rebel.

'High scaling effect'

"With the high scaling effect of those four cars, we will bring down the cost to less than 25,000 euros," VW brand production boss Christian Vollmer told Automotive News Europe.

The plan requires VW to stick closely to its battery production schedule. "Battery capacity will be the deciding factor in the ramp-up," Schaefer said.

One of the design goals for the ID 2all concept was to make the car's look more aligned to what longtime Volkswagen owners expect, with a focus on "likeability,” Schaefer told journalists at the event last Wednesday.

The ID 2all bears a strong resemblance to the VW Polo and Golf, unlike the brand's first iteration of the small EV, the chunky VW Life concept that debuted in 2021.

VW's recent design changes to the ID3 electric compact hatchback have also sought to introduce more conventionality to the car, which had initially been designed to stand apart from combustion-engine models such as the Golf.

"We are turning electric cars into daily drivers," Schaefer said.

Euro 7 rules to lead to name change

The ID2 could be badged Polo, depending on whether the Euro 7 emissions regulations is signed into legislation in its current form.

"The question is: What will the Polo cost after Euro 7 [goes into effect]?" Schafer said.

If the rules on pollutants such as nitrogen oxides and particulate matter are as strict as proposed by lawmakers, then smaller combustion engine vehicles "will become prohibitively expensive,” Schaefer said  

"It could mean another 3,000 euros in costs," he said, adding that calling the future small EV the Polo instead of the ID2 wasn't his preferred choice, "but I wouldn't categorically say, no."

Regardless of what name is chosen, the small EV will be available with the 2.0 version of software from VW's Cariad's unit, which will enable higher degrees of connectivity, Schaefer said.

The concept car boasted a 12.9-inch touchscreen, a digital driver display, a head-up display and VW's Travel Assist with semi-autonomous driving functions.

"MEB's scale effects let us inexpensively integrate technologies from higher classes into the ID 2all," Kai Grünitz, VW head of development, said in a statement.

Cupra previewed its version of the ID2 with the Urban Rebel concept in 2021.

The sporty looking hatchback is a "radical interpretation" of what the production car due in 2025 will look like, the brand said.

Skoda has so far only previewed its version of the car with sketch, saying it's one of three new electric models it will launch before 2026.