The promise of the €20,000 ‘affordable’ electric car has fallen apart

The downside of promising affordable electric cars for €20,000 is that the number sticks. The disappointment is likely to be great when the model actually hits the market, much more expensive than expected.

Electric cars at “affordable prices” of €20,000 are increasingly looking like a mirage. Every time you think of approaching it, the price moves away from what was originally announced. It must be said that nothing in the current context seems to allow manufacturers to offer electric cars at this price without relying on local support. It is through an interview in the German magazine Electrified that Volkswagen’s new boss, Thomas Schäfer, discusses the situation and the price of the future ID.2.

The Volkswagen concept isn’t the only one that could be affected, the electric Renault 5 finds itself in a similar situation, with, one imagines, identical implications for its future price.

The calculations are incorrect

At the IAA Munich fair in 2021, Volkswagen presented its ID concept. The life that has since become ID.2. The manufacturer then announced a model that would be placed under €20,000 in 2025. This entry-level model was supposed to replace the role currently held by the VW e-Up!

VW ID.Life/ID.2 // Source: Volkswagen

We are still far from the 2025 deadline for its commercialization, but the calculations are already completely skewed. Although they may still fall back in 2025, manufacturers are quite pessimistic. Volkswagen CEO Thomas Schäfer confirms this regarding the ID.2 announcements: If you look at the price increases, we quickly go from the desirable 20,000 euros to 25,000 euros. Then we will see where exactly we stand. »

If the rise in commodity prices partially explains the situation, it is not the only element to consider. When Electrified magazine asks if a vehicle for less than €20,000 is still possible, Thomas Schäfer replies: ” With current cost trends, it is certainly difficult to imagine. This relates not only to material costs, but also to labor costs. The two ascend parallel. »

Costs of raw materials and energy, wages, inflation and shortages have thwarted the predictions in the strategic plans of all manufacturers. They believed that manufacturing electric vehicles would cost less and less, by a mechanism of economies of scale. At the moment, rather the opposite is happening.

Renault 5 prototype // Source: Raphaelle Baut for Numerama

Electric car prices have increased by 15% in a few months

In Germany, according to a study by the Center for Automotive Research, the prices of the 15 most popular electric models have increased by 14.5% since last August. France must not be left behind in the issue of price increases for electric cars.

Dacia Spring // Source: Dacia

Just look at the evolution of the price of the most affordable model in France, the Dacia Spring, to see it. When launched in March 2021, the base model was marketed from €16,990 (before bonuses), it now appears at €19,800. That’s an increase of more than 16% in just over a year.

The Volkswagen e-Up is also shown from €25,400. The Renault Twingo ZE fares slightly better with a base price of €24,050, while the entry-level was around €21,500 in 2021.

All brands increase prices more or less discreetly. In this logic, a concept car that was presented last year at a price of around 20,000 euros would be marketed for at least 23,000 euros if it were released now, and certainly rather around 25,000 euros when it hits the market. .

Bad news for those who want to find an affordable electric car, because the used market for electric cars is also suffering from this increasing price trend. Even the Chinese manufacturers do not dare to go too far in the matter of the electric vehicle for less than €20,000 in Europe. It’s not a good sign.

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