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VW Planning an Electric Car Priced Under $23,000 to Rival Tesla

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【Summary】Volkswagen is planning to sell electric cars for less than 20,000 euros ($22,836) and protect German industrial jobs by converting three of its factories to build fully-electric to rival electric automaker Tesla, a source familiar with the plans said to Reuters.

FutureCar Staff    Nov 08, 2018 2:44 PM PT
VW Planning an Electric Car Priced Under $23,000 to Rival Tesla

Volkswagen is planning to sell electric cars for less than 20,000 euros ($22,836) and protect German industrial jobs by converting three of its factories to build fully-electric to rival electric automaker Tesla, a source familiar with the plans said to Reuters.

VW and other carmakers are struggling to adapt quickly enough to stringent rules introduced after the automaker plead guilty to falsifying diesel emissions tests. Volkswagen chief executive Herbert Diess warned last month that Germany's auto industry faces extinction unless automakers can adapt to building vehicles without diesel or gas engines.

Plans for VW's new electric car, known as "MEB entry" and with a production volume of 200,000 vehicles, are due to be discussed at a supervisory board meeting on Nov. 16, according to Reuters.

Another vehicle, the I.D. Aero, will be built in a plant that is currently making the VW Passat sedan, the source said. The Wolfsburg-based carmaker is also expected to discuss far-reaching alliances with Korean battery cell manufacturer SK Innovation and rival Ford, the source said.

VW declined to comment on the plans.

VW's Planned Transformation to Electric Vehicles

The planned November 16 strategy meeting will discuss Volkswagen's ambitious transformation plan, from being Europe's largest maker of combustion engine vehicles into a mass producer of battery-powered cars.

VW's strategy shift comes as cities in Europe begin to ban diesel engine vehicles, forcing carmakers to think of new ways to safeguard 600,000 German industrial jobs, 436,000 of which are at automotive companies and their suppliers.

VW's upcoming electric van, the ID Buzz, is due to be built at the automaker's plant in Hannover, where its T6 Transporter van is made, the source said.

To free up production capacity for electric cars in Hannover, VW Transporter vans could be produced at a Ford plant in Turkey instead, if German labor unions, who hold half of the seats on VW's board of directors, agree, the source added.

VW & Ford in Early Talks on Collaboration

Reuters reported last month that VW and Ford are in "exploratory talks" about an alliance to develop self-driving and electric vehicles and to complement each other's global production and sales footprints.

Ford has strong sales and profits in the United States thanks to its best-selling F-150 pickup, while Volkswagen dominates the market for passenger cars in Europe.

The companies are considering cooperation deals in the areas of commercial, electric and autonomous vehicles, although a final agreement will unlikely be announced at the November 16 strategy meeting at Volkswagen, the second source said.

The details of a cooperation deal with Ford may take until the end of the year to be finalized, the second source said. The German carmaker will mainly focus on weighing the benefits of converting its VW factories in Emden, Zwickau and Hanover, which all build combustion-engined cars, to electric ones under the plans being discussed by the board of directors, the source said.

Carmakers in Germany agreed on Thursday to spend up to 3,000 euros ($3,430) per vehicle to add more efficient exhaust filtering systems to cut diesel emissions, but failed to prevent bans on diesel vehicles by the cities of Cologne and Bonn.

EU lawmakers have agreed to seek a 35 percent cut in car emissions by 2030 after a U.N. report called for dramatic steps to slow global warming. Diess said to cut average fleet emissions of carbon dioxide in Europe by 30 percent by 2030, VW needs to raise its share of fully electric vehicles to 30 percent of new car sales.

The shift from combustion engines to electric cars would also cost 14,000 jobs at VW by 2020 as it takes less time to build an electric car than a conventional one and because jobs will shift overseas to battery manufacturers.

In Europe there are about 126 plants making combustion engines, employing 112,000 people, the largest being VW's plant in Kassel.

resource from: Reuters

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