FRANKFURT (Reuters) – Volkswagen (VOWG_p.DE) intends to sell electric cars for less than 20,000 euros ($ 22,836) and protect German jobs by converting three factories to produce Tesla (TSLA.O) rivals, a familiar source with the said plans.
VW and other automakers are struggling to adapt quickly enough to strict rules introduced after the automaker was found to have scammed diesel emissions tests, with its managing director Herbert Diess who warned last month that German automotive industry is destined for the extinction.
Plans for VW's electric car, known as the "MEB entry" and with a production volume of 200,000 vehicles, will be discussed at a meeting of the Supervisory Board on November 16, the source said.
Another vehicle, the I.D. Aero will be built into a plant that is currently making the VW Passat, a mid-size sedan, the source said.
The car manufacturer in Wolfsburg, which has refused to comment on the plans, should also discuss large-scale alliances with the battery manufacturer SK Innovation (096770.KS) and rival Ford (F.N), said the source.
The November 16 strategy meeting will discuss the transformation plan of Volkswagen to move from being the largest European producer of combustion engine vehicles into a mass producer of electric cars, another source familiar with the said deliberations.
VW's change in strategy comes when cities are starting to ban diesel-powered vehicles, forcing manufacturers to think of new ways to safeguard 600,000 German industrial jobs, including 436,000 at car manufacturers and their suppliers.
An electric van, the Buzz ID, should be built at the VW plant in Hanover, where its T6 Van is produced, the source said.
In order to free up the production capacity of electric cars in Hanover, the VW conveyor vans could be produced at a Ford (F.N) plant in Turkey, if the German trade unions, which hold half of the seats on the board of directors of VW, are in agreement, the source added.
VW and Ford are participating in "exploratory talks" on an alliance for electric vehicle development and autonomous driving and to integrate production and sales footprints globally, according to Reuters last month.
Ford has strong sales and profits in the United States thanks to its exposure to the lucrative truck segment, while Volkswagen dominates the passenger car market in Europe.
Companies are considering cooperation agreements in the areas of commercial, electric and autonomous vehicles, although it is unlikely that a final agreement will be announced at the meeting of the 16 November strategy in Volkswagen, according to the source.
The details of a cooperation agreement with Ford could take until the end of the year to be finalized, according to the source. The German carmaker will focus primarily on discussing the merits of converting its VW factories to Emden, Zwickau and Hanover, which build all combustion cars, to electric cars according to plans discussed by the board of directors, the source said.
German automakers agreed on Thursday to spend up to 3,000 euros ($ 3,430) per vehicle to add more efficient effluent filtering systems to reduce diesel emissions, but did not prevent the ban on diesel vehicles in Cologne and Bonn.
European lawmakers have agreed to look for a 35 percent cut in car emissions by 2030, after a U.N. report has called for concrete steps to slow global warming. Diess said to cut Europe's average carbon footprint by 30% by 2030, VW needs to increase its electric vehicle offully share to 30% of new car sales.
The transition from combustion engines to electric cars would also cost 14,000 jobs to VW by 2020, as it will take less time to build an electric car than a conventional one and because jobs will move overseas to manufacturers of cars. batteries. In Europe there are about 126 plants that produce combustion engines, with 112,000 employees. The largest such plant in Europe is VW's in Kassel.
Report by Jan Schwartz; Editing by Edward Taylor and Alexander Smith