Electric cars: the promise of a €20,000 model

Published on 12/12/2023, updated on 12/03/2024

Electric cars: the promise of a €20,000 model

By the second half of 2023, several manufacturers had announced that they would be able to produce electric cars for around €20,000, but these are yet to come to fruition. Citroën has promised a launch as early as next year, while Volkswagen is aiming for 2025 and Renault 2026.

This year, a number of European manufacturers have announced plans to be able to offer an electric car costing less than €20,000, excluding subsidies, within the next two to three years. Promises are all well and good, of course, as long as they are kept.

Volkswagen was the first to reveal its plans. Last February, the German car giant announced its intention to make electric cars more widespread by unveiling the outline of its forthcoming ID.2all – a concept somewhere between the Polo and the Golf; in other words, a city car, but with a price tag of under €25,000, excluding subsidies, and a range of 450km. The only problem is that we won’t see the first models on European roads until 2025.

In late November, the Wolfsburg-based manufacturer also took everyone by surprise by announcing a new entry-level electric model priced at around €20,000. Good news, then, except for one detail: this model is intended solely for the Chinese market – the leading market for the German manufacturer, which is facing extremely fierce competition from local manufacturers.

With this in mind, Volkswagen intends to acquire a new platform by 2026, based on the MEB line that produces the ID range and to be used for its future electric models. The German group is currently facing financial difficulties.

In late November, Volkswagen’s CEO, Oliver Blume, stressed that he was prepared to consider cutting jobs, by not replacing employees who had retired from certain positions, in order to improve profitability and achieve an operating margin of 9-11% by 2030 as part of a transformation plan aimed at saving €10 billion.

French car manufacturers lying in ambush

Last June, Citroën announced that it would be able to offer its new ë-C3, a small hatchback costing under €25,000, from early 2024. Assembled in Slovakia, the model would be the first electric model from a European manufacturer at this price level. Last October, the brand with the chevrons even announced that it would be able to offer the model at €23,300 with a range of 320km, to be followed by a €19,900 version in 2025. It remains to be seen whether Citroën and the Stellantis Group will be able to meet their proposed deadlines.

French manufacturer Renault, meanwhile, is following hot on Citroën’s heels, having announced, in November, the launch of a new 100% electric Twingo priced at under €20,000… in 2026. While this is a perfectly commendable ambition, Renault has not provided any details of range but has promised a very low consumption of around 10kWh/100km. This future model is part of the strategy it calls Ampère, the name of Renault’s new subsidiary, which is expected to produce seven new electric models by 2031. Renault is also keen to develop a ‘social leasing’ scheme in France priced at €100 a month – a concept that is very much supported by the French government.

A price on the rise since 2019

The price of electric cars remains the main barrier to purchase and has far outweighed fears regarding range or recharging. In November, NGO Transport & Environment (T&E) published a study showing that European manufacturers have increased car prices by an average of 41% since 2019 – double the rate of cumulative inflation and even higher than the rise in the cost of raw materials.

More specifically, the NGO explained that the prices of small cars have risen by €6,000 in four years – an increase of up to 56% compared to 2019, while for the most expensive models, the NGO pointed out, prices have risen by between 38% and 56%.