Converting the world’s automobile fleet to fully electric will be more energy efficient in the long run, but Hans-Dieter Poetsch, chairman of Volkswagen, warns that it’s not going to be cheap.
The auto executive tried to tamp down expectations that VW’s entry-level electric vehicles were going to be competitively priced with their non-electric counterparts, in an interview with the Welt am Sonntag newspaper, published today (Jan. 20).“The current price level cannot stay the same if these cars are equipped with electric motors,” he said, according to the Reuters. “Therefore, it will inevitably lead to significant price increases in the small car segment.”
Poetsch also said the higher costs of small electric carts might make them unaffordable for people with low incomes. It’s a bit of strange comment from the leader of a company that is more and more tightly tying its future to electric vehicles. Volkswagen is set to invest $11.8 billion in China by 2025 to develop and manufacture electric cars, and make 50 million electric cars around the world.
In addition, prices have dropped considerably for electric vehicles in the past year, especially as China is poised to produce so many electric cars that the government is limiting manufacturing permits for electric car startups. In China, low-speed electric vehicles (that typically top out at somewhere between 25-40 mph) cost as little as $1,000 even without subsidies. Four-door models with near 200-mile range are beginning to debut at $8,680 in China. In India, the 75-mile range Mahindra e2o costs around $10,000. And in the United States, a number of carmakers are starting to offer long-range electric vehicles for close to $35,000, like the $36,450 2019 Hyundai Kona EV, as federal tax incentives for EVs begin to expire.
Volkswagen plans to launch the first of its new line of electric cars, the ID, in Europe in 2020. It’s expected to be priced similarly as a fully loaded diesel Golf, which sells for between $35,000 and $40,000 in the US.