VW Group will launch Polo-sized EVs, Diess says

Volkswagen Group is redoubling its efforts to launch small battery-powered cars in Europe, where the segment is expected to boom in the coming years as more competitors start to offer entry-level EVs.

The automaker will launch full-electric cars about the size of the VW Polo small-segment car starting in 2025, VW Group CEO Herbert Diess said.

The cars will be offered by various group brands, Diess told reporters during the automaker's annual press conference on March 16. By that time battery cell technology should be advanced enough for the cars to be sold at an attractive price for entry-level buyers, Diess said.

There is a growing emphasis on small EVs because the cost to add fuel-saving technologies such as hybrid powertrains to entry-level combustion engine models to comply with the European Union's tougher CO2 emissions rules is making them unprofitable. Automakers are either quitting the small and minicar segments or launching full-electric models.

VW brand boss Ralf Brandstaetter told reporters on March 5 that VW Group, with its multiple brands, has the scale needed to succeed in the small EV sector. 

VW brand plans to launch a small EV in 2025 priced between 20,000 euros ($24,000) to 25,000 euros, Brandstaetter said. The car will be positioned below the ID3 compact hatchback that went on sale in Europe last September.

Brandstaetter's comments came after VW Group's Seat unit said it aims to launch a small EV under its Cupra brand.

The model would be positioned below Cupra's first battery-electric car, the Born compact hatchback that will go into production in the second half at VW Group's plant in Zwickau, Germany. The factory currently builds the ID3 and the VW ID4 crossover.

"For us, the next big game changer for the volume brands is urban electric vehicles, and we aim to play a key role in it, with a special focus on our objective of electrifying Spain," a Seat spokesman told Automotive News Europe.

A small EV priced between 20,000 and 25,000 euros "is in principle conceivable for several group brands," the spokesman said.

No decision has been made on the production location or launch date for the model, and it is unclear whether Seat would also get a version of the small EV.

Brandstaetter declined to comment on where the small EVs will be built when asked by reporters. "There are different scenarios. An announcement will be made later," he said.

The small EVs would use a shortened version of VW Group's MEB electric-only architecture known as "MEB Entry."

VW brand's small EVs could be a hatchback badged the ID1 and a crossover called the ID2, sources told Automotive News Europe sister publication Automobilwoche. VW disclosed plans for the ID1 and ID2 entry-level EVs in a presentation to investors on Dec. 4, without giving additional details.

Seat's plant in Martorell, near Barcelona, is emerging as the leading candidate to produce the VW Group’s small EVs.

VW Group CEO Herbert Diess said in a LinkedIn post on Sunday that the automaker plans to turn Cupra into a full-electric brand and exclusively make battery-powered cars at Martorell.

But the decision depends on EU financial support for an EV battery plant in Spain, Diess said.

It's not known whether Audi and Skoda would also launch versions of the VW and Cupra small EVs.

VW Group currently sells full-electric versions of its VW Up, Seat Mii und Skoda Citigo minicars built in Bratislava, Slovakia, but the cars will not be replaced because they are costly conversions of a combustion-engine architecture.

If VW Group sticks to the 2025 launch date for its first small EV, it will arrive later than many rivals.

Renault CEO Luca de Meo has said that by 2023 the automaker will launch a small "affordable" battery-powered car with a retro design inspired by the Renault 5.

Renault currently sells an electric version of its Twingo minicar and the Zoe small EV, which was Europe’s top-selling battery-powered car last year.

Fiat last year launched the New 500, a battery-powered car based on its 500 combustion engine hatchback.

The battery-powered Honda e was introduced in Europe last year.

PSA sells full-electric versions of the Peugeot 208 and Opel/Vauxhall Corsa small hatchbacks, the Opel/Vauxhall Corsa-e and Peugeot e-208.

Ford has axed its Ka minicar in Europe and Opel has dropped its Adam and Karl minicars because of the relatively high CO2 emissions from their combustion engines. Ford has said it will only sell full-electric cars in Europe by 2030 and plans to convert its plant in Cologne, Germany, to produce EVs based on VW Group’s MEB architecture.

Hyundai and Kia, two strong competitors in the minicar segment with the i10 and Picanto, have different timetables for electrifying their offerings.

Kia is developing an electric minicar similar in size to its Picanto, the automaker's Europe chief operating officer, Emilio Herrera told Automotive News Europe in January. Hyundai is studying whether it needs an electric minicar but such a vehicle is not currently part of its plans, the brand's CEO for Europe, Michael Cole, told Automotive News Europe, also in January.