Volkswagen Sets Eyes on $22,000 EV as It Looks to Rival Tesla, CEO Says Focus on Simplifying Company Structure, Building up Competencies

Volkswagen Sets Eyes on $22,000 EV as It Looks to Rival Tesla, CEO Says Focus on Simplifying Company Structure, Building up Competencies
The VW logo is on display at the headquarters of German carmaker Volkswagen (VW) in Wolfsburg, northern Germany, on March 26, 2021. (Ronny Hartmann/AFP via Getty Images)
Volkswagen Group CEO Herbert Diess said on Wednesday self-driving technology will be a big game-changer in the coming years and that the German automaker is working on a $22,000 electric car as it speeds up efforts to overtake current market leader Tesla Inc. in the electric vehicle space.

VW and Self-Driving

Diess talked about autonomous driving, which he sees as the biggest gamechanger for the automotive industry.

“So this will be a long process of competition for a long period to come. We are building up competencies to become a serious competitor in this race,” Diess wrote in his first Ask Me Anything Q&A event that he held on the social media platform Reddit.

Volkswagen aims to bring to market a retro-styled electric van with self-driving capabilities by 2025. The automaker is developing the vehicle with Argo AI, a Pittsburgh-based autonomous vehicle startup.

The vehicle is expected to feature Level 4 autonomy, which means drivers will not be required to take over the wheel but the vehicles can only operate in specific conditions.

Volkswagen had last month announced a software alliance with German technology company Bosch to equip the automaker towards Level 4 autonomy.

There are five levels of automation under standards created by SAE International. A Level 4 system implies the vehicle can handle all aspects of driving without human intervention. Tesla is currently at Level 2.

Affordable Electric Cars

Diess also said price is a challenge and that Volkswagen is working on affordable, entry-level EUR 20,000 ($22,340) electric cars.
Tesla CEO Elon Musk had recently said the EV maker is currently not working on a $25,000 electric vehicle and instead focusing on the self-driving technology.

Reducing Complexity

The 63-year old CEO also talked about simplifying the company structure and adopting a Tesla-like working style in which different engineering teams work together in the company.

“Volkswagen will remain a multi-brand mobility company working worldwide and being present in many segments. To reduce complexity we are focusing on platforms, even more in the future,” Diess said.

Volkswagen is banking on its next-generation mechatronics platform Scalable Systems Platform, or SSP, betting on CARIAD for its software needs and aiming to lower battery costs by up to 50 percent with a unified cells approach.

“But yes, in some segments we are still too complex in our product offering. We are making good progress in reducing complexity.”

By Rachit Vats
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