Volkswagen says it plans to bring an affordable electric vehicle to the U.S. market in the next three to four years. The vehicle will have a base price of less than $35,000, and may even benefit from American tax incentives thanks to localized production.
The announcement comes as the electric vehicle market chills around the world. However, one of the major concerns expressed by consumers is the high price of the vehicles in the segment, something that a cheaper vehicle may help address.
“We are not scaling back plans for EVs in the U.S. market,” said Reinhard Fischer, senior vice president and head of strategy at VW Group of America, at an event hosted by Reuters. He added that the vehicle will be produced in either the U.S. or Mexico.
Read: VW Boss Says €25,000 EV Will Be Profitable, Sub-€20,000 EV Is In The Works
Volkswagen operates plants in Puebla, Mexico, and Chattanooga, Tennessee, where it already builds the all-electric ID.4, which has a base price of $38,995. It also plans to open a plant in South Carolina, which will produce electric vehicles for the Scout brand.
The automaker is also looking at producing the new vehicle’s batteries in North America. Volkswagen has announced plans to open its first battery plant outside of Europe in Canada. If it produces both the vehicle and its batteries in North America, the vehicle would be eligible for $7,500 in tax incentives offered to U.S. consumers who buy an EV.
While it is unclear what the vehicle will be, the automaker is bullish about the cost savings its latest EV technology, including prismatic battery cells, will offer it. It highlighted those savings by unveiling the ID.2all concept in Europe recently. The compact hatchback is expected to retail for less than €25,000 ($26,776 USD at current exchange rates) while still making profits for the brand.
Although the vehicle is quite small for the U.S. market, the automaker’s American division did express a strong interest in the performance variant based off it, the ID.GTI concept (below). However, it’s unknown if Fischer was referring to that model or something entirely different.
