VW Chairman Thinks Electric Cars Could Make Entry-Level Cars Unaffordable
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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.
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I don’t see Cadillacs announcement to preclude Chevrolet or Buick from getting cars based on BEV2 or BEV3 before, during or after Cadillac. They will just have different tradeoffs just like current Chevy, Buick and Cadillac models. Chevy will have less technology and luxury and Buick will have less performance. But Cadillac will have it all. It will allow them to hit different price points for the different brands. Will there be a $16k EV to replace the Cruze – no not at this time. But I could see a Bolt like vehicle replacing a well specced Trax for upper $20k’s.
Hans Dieter Pötsch is right. The industry will see a spike in entry-level car prices as they turn to battery-electric powertrains. This will happen with a trend away from personal car ownership with most people preferring to travel using the less expensive driverless electric fleet cars.
Car ownership is not going away anytime soon and driverless cars on a full-scale basis is becoming more and more a fantasy.
I’ll take that VW over the Caddy.
I found it funny when VW said that they will not introduce no new ECE engine families after 2026. Well, 2026 is 7 years away, and we all know that engine families can literally linger for three for four decades or more.
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