Volkswagen to pump out cheap electric vehicles from converted German factories

Volkswagen (VW) is planning to sell cheap electric cars retailing for less than €20,000 (£17,408) according to a Reuters source.

The announcement will see the company converting three factories to produce the vehicles, thus protecting German jobs into the future.

The move could be seen as a way to compete against Tesla, which is slowly ramping up production of its Model 3 vehicles after several manufacturing hiccups. 

VW and other carmakers are struggling to adapt quickly enough to stringent rules introduced after the carmaker was found to have cheated diesel emissions tests, with its chief executive Herbert Diess warning last month that Germany’s auto industry faces extinction. 

The source said that plans for VW’s electric car, known as “MEB entry” will have a production volume of 200,000 vehicles and discussions with the supervisory board are expected to take place next week.

The source also said that another vehicle, the ID. Aero, will be built in a plant currently making the VW Passat, a mid-sized sedan.

The plans are not surprising considering rising electric car sales around the world and earlier announcements that the automaker intends to lean more heavily on electric vehicle sales in the future. 

VW is also expected to discuss far-reaching alliances with battery-cell manufacturer SK Innovation and rival Ford, the source said.

The November 16 strategy meeting will discuss Volkswagen’s transformation plan to shift from being Europe’s largest maker of combustion engine vehicles into a mass producer of electric cars, another source familiar with the deliberations said.

VW’s strategy shift comes as cities start to ban diesel engine vehicles, forcing carmakers to think of new ways to safeguard industrial jobs, such as those of 600,000 Germans, 436,000 of which are at car companies and their suppliers. 

An electric van, the ID. Buzz, is due to be built at VW’s plant in Hannover where its T6 Van is currently made, the source said.

To free up production capacity for electric cars in Hannover, VW’s transporter vans could in future be produced at a Ford plant in Turkey, if German labour unions - who hold half the seats on VW’s board of directors - agree to the move, the source added.

VW has already outlined its vision for an electric future, presenting an all-new suite of concept vehicles under the ID. banner.

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