Could the industry’s turn to electric cars be somewhat premature and price lower-income buyers out of the market? VW Group chairman Hans Dieter Pötsch believes so.
According to Reuters, the executive believes the industry could see a spike in entry-level car prices as they turn to battery-electric powertrains. Why? The technology is still much more expensive than a traditional internal-combustion engine, and at the price point, there’s no way to avoid more costs.
Pötsch specifically referenced city cars, likely the size of the Volkswagen Up, and not models that popular in the United States. Think cars sized like the Chevrolet Spark. He said the current price level for the technology cannot stay the same if VW wants to achieve its goal of affordable electric cars for every segment.
We can likely expect most automakers to focus on larger, more profitable cars as the center of electrification in the coming years. At VW, Porsche and Audi have taken the lead.
At GM, the automaker has apparently learned its lessons from pushing mass-market electrified cars this past decade. While the automaker won’t abandon Chevrolet and Buick when it comes to future electric cars, Cadillac will lead the way forward. GM showed off the brand’s first all-electric car coming next decade earlier this month. The unnamed SUV will ride on a new flexible architecture called BEV3 and provide at least 300 miles of range. Most importantly, it will allow GM to build profitable electric cars.
As battery costs come down, we’ll then see electric powertrains fitted to more standard vehicles at scale. Battery-electric cars are expected to reach cost parity with traditional cars sometime next decade at current projected rates.