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

The downside of promising affordable electric vehicles at €20,000 is that the number sticks. The disappointment is likely to be high, when the model will actually hit the market, much more expensive than expected.

“Affordable” €20,000 electric vehicles are increasingly looking like a mirage. Each time one thinks of approaching it, the price moves away from what was initially 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 the local aid. It is through an interview in the magazine allemand Electrifiedthat the new boss of Volkswagen, Thomas Schäfer, discusses the situation and the price of the future ID.2.

The Volkswagen concept is not the only one that could be affected, the Electric Renault 5 finds itself in a similar situation, with, one imagines, identical consequences on its future tariff.

The calculations are wrong

At the 2021 IAA Munich show, Volkswagen presented its ID concept. Life, which has since become ID.2. The manufacturer then announced a model that would be positioned below €20,000 in 2025. This entry-level model should 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 marketing, but the calculations are already completely distorted. Even if they can still come back down by 2025, manufacturers are rather 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. We will then see where we stand exactly. »

And at increase in the cost of raw materials partly explains the situation, it is not the only element to be taken into account. When Electrified magazine asks if a vehicle for less than €20,000 is still possible, Thomas Schäfer replies: “ With the current evolution of costs, it is certainly difficult to envisage. This does not only concern material costs, but also labor costs. The two are going up in parallel. »

Cost of raw materials and from the‘energy, wages, inflation and shortages, have thwarted the predictions of the strategic plans of all manufacturers. They thought that manufacturing electric vehicles would cost less and less, by a mechanism of economy of scale. For the moment, it is rather the opposite that 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 Center for Automotive Research study, the prices of the 15 most popular electric models have increased by 14.5% since August of last year. France is not to be outdone on the issue of price increases for electric vehicles.

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 it was launched in March 2021, the basic model was marketed from €16,990 (before bonuses), it is now displayed at €19,800. This is more than 16% increase in just over a year.

The Volkswagen e Up is also displayed from €25,400. The Renault Twingo ZE does little 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 presented last year for a price of around €20,000 will be marketed at least €23,000 if it were released now, and certainly rather around €25,000 by the time it is put on the market. .

Bad news for those who would like to find an affordable electric vehicle, because the second-hand market for electric vehicles is also affected by this upward trend in prices. Even the Chinese manufacturers do not dare to advance too much on the question of the electric vehicle at less than 20,000 € in Europe. It is not a good sign.