(Bloomberg) -- Volkswagen AG is accelerating development of a compact electric car that will cost less than 30,000 euros ($35,800) as tightening emissions rules and generous subsidies bolster sales of battery-powered vehicles, according to people familiar with the matter.
The VW-branded car may be introduced as early as 2023, flanking the ID.5 crossover to be sold from next year as well as an electric iteration of the iconic hippie-era minibus slated for 2022, said the people, who asked not to be identified discussing internal plans.
VW is also working on a fully electric station wagon, dubbed Aero, with a battery range of as much as 700 kilometers (435 miles) to be sold from 2023, the people said.
The world's best-selling automaker rolled out the ID.3 hatchback in Europe in September, its first vehicle based on underpinnings designed purely for battery-powered vehicles. The German manufacturer's EV push will go global with the ID.4 SUV sibling next year, which will be produced in Europe, China and North America.
To free up funds for the industry's biggest electric-car offensive, VW will take more steps to shrink its portfolio of combustion-engine cars after already culling models including the Beetle and the Scirocco.
It will discontinue the mid-sized Passat sedan in the U.S. and sell only the station-wagon version in Europe, the people said. VW may also phase out the upscale Arteon coupe, they said.
Cost Cuts
The VW brand, which accounts for roughly half of the group's deliveries, is stepping up efforts to cut costs and capital expenditures, including a fresh round of job reductions in Brazil. The business plans to reach break-even in South America and the U.S. next year.
Even as the Covid-19 pandemic still weighs on several markets, VW's order intake has been high, helped by surging demand for the hybrid versions of the high-volume Golf and Passat models.
The brand expects to gain market share during the fourth quarter and in 2021, according to the people. VW lifted its internal global market share target for next year to 8.6%, from 8.1% previously.
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