German automaker Volkswagen has concrete plans underway to sell electric cars for prices less than $22,836, a source told Reuters. The company wants to convert 3 of its factories to Tesla rivals in order to protect German jobs.
The move is as a result of Volkswagen’s harsh experience after the introduction of stringent rules in the auto industries. The rules constituted after diesel emissions tests found that automakers have been cheating. Earlier last month, Volkswagen Chief Executive Officer Herbert Diess, had warned that Germany’s auto industry is in danger of extinction.
Adequate plans are in place for the VW electric car, referred to as MEB entry, with strategies for a production volume of 200,000 vehicles due to be discussed on November 16 during the company’s supervisory board meeting, according to the source. The plant currently producing the VW Passat, a mid-sized sedan, will be charged to make another VW vehicle called the I.D. Aero, the source said.
Volkswagen would partner with SK Innovation and Ford
Volkswagen, which declined to make comments concerning these plans, will be discussing with rival Ford, and SK Innovation – manufacturers of battery cells for an alliance.
Part of the issues to be discussed on the November 16 supervisory board meeting is the transformation of Volkswagen into a mass producer of electric cars from being the largest maker of combustion engine vehicles in Europe, a different source familiar with the plans said.
New policies are forcing the extinction of combustion cars
VW’s strategy shift plan came due to the decision of most cities to ban vehicles using diesel engines. The decision has forced many carmakers into considering new ways of keeping over 600,000 German industrial jobs. From which approximately 436,000 involve car companies and their suppliers. A shift from combustion engines to electric cars is expected to cost over 14,000 VW workers their job by the year 2020. This is because the time taken for electric cars to be built is lesser than the conventional cars. In Europe however, plants manufacturing combustion engines are about 126 and they have a total of 112,000 employees. Volkswagen’s plant in Kassel is the largest among the plants.
VW wants to produce the ID Buzz, an electric van at its Hannover plant, the same plant producing the T6 Van. As part of plans to create sufficient production capacity in the Hannover plant for the electric cars production, Volkswagen plans to produce its transporter vans at Ford’s plant in Turkey. However, the decision is subject for agreement by the German labor unions constituting over half of VW’s board of directors seat.
Both Volkswagen and Ford are really considering partnering in areas like commercial, electric and autonomous vehicles. However, the plans are still inconclusive and would be officially announced after the strategy meeting on November 16 at Volkswagen.