VW is planning subcompact e-car to challenge Tesla

Volkswagen plans to add a subcompact crossover costing about $21,000 to its all-electric I.D. range, expanding its lineup of zeroemissions vehicles that are more affordable than those of Tesla, according to people familiar with the matter.

The entry level vehicle may be built at VW’s factory in Emden, Germany, said the people, who asked not to be identified because the plan hasn’t received final approval by the manufacturer’s supervisory board. Sales could start sometime after 2020, and the company expects to sell about 200,000 per year, they said.

That would put it on par with current production levels of the more-expensive Tesla Model 3, the U.S. electric-car leader’s most affordable vehicle, which is due to arrive in Europe next year.

The I.D. range is at the heart of one of the auto industry’s most aggressive electric-car initiatives — a plan to put 50 models on the road across the group, including volume brands such as VW, Seat and Skoda. The world’s largest automaker plans to use its massive scale to offer lessexpensive e-cars than rivals like Tesla, hoping to blunt their early advantage as more consumers adopt zero-emissions vehicle.

The first in the lineup is the I.D. Neo, which will be made at Zwickau, Germany, and begin sales in 2020. With less complexity and fewer model variants, VW may be able to produce the car in roughly half the time needed to assemble a Golf hatchback, according to the people. VW has said it will be sold for a price of a comparable diesel car.