German automaker Volkswagen has unveiled a new budget electric vehicle, the ID.2, with a range of up to 450 kilometres and a price tag under €25,000. The model is one of 10 new electric vehicles the company plans to release by 2026, as it aims for an 80% share of electric vehicles in Europe. VW hopes to maintain the low price through “economies of scale” achieved with high sales volume.
Volkswagen has said it will invest €122bn in the shift towards electric vehicles over the coming years, with the aim of having every fifth vehicle sold worldwide being electric by 2025. A significant proportion of the spending will go towards building a series of battery factories, as well as expenses linked to securing raw materials for batteries. The company also plans to focus on growing its presence in North America and increasing its competitiveness in China.
In 2022, battery-powered cars accounted for a record 7% of the VW group’s deliveries, with just over 572,000 units sold globally. VW expects electric vehicles to make up around 10% of its car sales in 2023. Thomas Schaefer, CEO of VW Passenger Cars, said the company is “implementing the transformation at pace to bring electric mobility to the masses”.
The company’s push towards electrification comes as competition in the electric vehicle sector heats up. VW’s new budget electric vehicle will compete with other affordable models such as the Renault Zoe and the Dacia Spring. However, some experts have raised concerns over the sustainability of the lithium-ion battery technology used in electric vehicles, and the impact of increasing demand for raw materials such as lithium and cobalt.
Overall, VW’s electrification push marks a significant step towards a more sustainable automotive industry, and the company’s investment in battery factories and raw materials could help address concerns around the sustainability of electric vehicle production.