Volkswagen and Renault may develop affordable electric cars together - report

Could the spiritual successor to the Volkswagen Up, and the fourth-generation Renault Twingo be twins under the skin? Maybe…

With Chinese automakers making a big impression at the affordable end of the European electric vehicle (EV) market, European car firms are scrambling to find a solution.

One possible solution is for rivals to team up to develop small, affordable EVs together. By sharing the cost of research and development, and gaining economies of scale, European brands might be able to offset China’s competitive advantages.

Handelsblatt understands Volkswagen and Renault are in talks to do just that, with the German and French automakers scoping out if they can develop a car priced from around €20,000 ($32,700) with joint annual sales of between 200,000 and 250,000 per year.

According to the German business newspaper’s sources, the discussions are at a “very early stage” and it’s possible that there will be no agreement.

Although Volkswagen declined to comment, Renault confirmed to Handelsblatt that it is “in discussions but nothing has been finalised”.

A spokesperson for Renault stated co-operation was necessary in order to compete in the entry-level EV market.

Last month Renault unveiled the retro-themed Twingo Legend concept, which is thought to preview the fourth-generation electric-only Twingo due in 2026.

At the concept’s debut, Renault indicated the new Twingo would be priced from €20,000, but didn’t provide any details about the car’s drivetrain. It also didn’t say whether it will use one of its existing architectures, such as the CMF-BEV (aka AmpR Small) platform that underpins the upcoming Renault 5 hatch and Renault 4 crossover.

Given Renault is unlikely to want to field two different €20,000 EVs in Europe, a possible scenario could see Volkswagen’s €20,000 EV use the same platform as the new Twingo.

This wouldn’t be the first time Renault has paired up with a rival to help develop the Twingo. The current third-generation model uses the same rear-engine, rear-wheel drive architecture as the Smart ForTwo and ForFour. Indeed, both the Twingo and ForFour were built by Renault at its factory in Novo Mesto, Slovenia.

Cross-company joint ventures at this end of the market — where volumes might be high, but the profit margins thin — aren’t unusual, with Peugeot, Citroen and Toyota working together to engineer and build two generations of the C1, 106/107, and Aygo triplets from 2005 to 2022.

Ever since Renault bought a controlling interest in Nissan in the late 1990s, the French automaker has made a virtue out of cross-company platform sharing.

The Volkswagen Group is no stranger to the internal use of common platforms across a large swathe of models and brands. Outside of a few collaborations, such as the Volkswagen Sharan/Ford Galaxy/Seat Alhambra people movers, as well as the ill-fated Chrysler-based Volkswagen Routan, it has mostly done things in-house, though.

That’s changed recently, with the company’s wide-ranging partnership with Ford seeing the two share development of the Ford Ranger/Volkswagen Amarok, Volkswagen Caddy/Ford Transit Connect, and Ford Transit Custom/Volkswagen Transporter.

Ford is also using Volkswagen’s MEB architecture for its European Ford Explorer crossover EV, and a yet-to-be electric coupe SUV set to be called Capri.