Have Volkswagen unions blocked the €20,000 electric car?

The Volkswagen Group crisis continues to dominate the headlines across Europe. In Germany, criticism is raining down on the national carmaker for investment delays, car quality problems and erroneous market forecasts. Complicating matters is the trade war between Europe and China, which has been made official with the introduction of customs duties on electric cars produced in China.

The German trade unions have been on the warpath for weeks, but now their actions are being called into question. On the one hand, there is the problem of the absolute number of Volkswagen employees, which is higher than that of any other car manufacturer in the world, and on the other, there are the labour costs, protected over the years by the powerful IG Metall union through particularly generous collective agreements.

These costs inevitably affect the industrial competitiveness of the company, which is unable to produce electric cars as cheaply as other manufacturers. We're talking here about the future ID.2, which is expected to cost no less than €30,000 (£25,000).

Gallery: Volkswagen ID.2all Concept

25

An own goal?

What's more, according to an investigation by our colleagues at Motor1 Germany, it was this same union that blocked production of a low-cost city car, which was to be developed by exploiting savings within the Renault group as part of the Twingo project.

More about VW's woes:

Volkswagen is really preparing to close three German factories

If Volkswagen is in crisis, I won't buy a Cupra

Volkswagen: No agreement with unions - strikes possible from December

Volkswagen cuts costs: MEB+ and ID.Roc platforms at risk

The German manufacturer is said to have pulled out of the collaboration because of union pressure acknowledged by Daniela Cavallo, chairwoman of VW's works council, who said in an official statement: "For the focal point of our electric strategy, i.e. the brand's future hatchback, we wanted to go head-to-head with the competition and have it built by Dacia."

The union's aim was to keep production in Germany, since the Twingo will be made in Slovenia, but the result did not live up to expectations. The German compact, along with other VW group cars such as the Cupra Raval and the Skoda Epiq, will in fact find their cradle in Spain, in Pamplona to be precise, in the factory dedicated until now to the Polo (which is in the meantime moving to South Africa).

In the meantime, Renault is pressing ahead with its plans to launch the car in 2026 at a price of €20,000,(£17,000) to take on rivals such as Dacia Spring and Leapmotor T03, which sells in Italy for €17,900 (£15,995 in UK). Other 'low-cost' electric cars such as the Fiat Grande Panda and Citroën e-C3 are also part of this panorama.

Gallery: Renault Twingo E-Tech Electric Prototype

24

Source: Renault

Speed is the watchword

Above all, the case highlights the structural nature of the problem for the European car industry, particularly the German one, whose competitiveness is undermined by a superimposition of constraints, costs and vested interests that make any process of transformation slow and complicated at a time of transition when the key word should be "speed".