The Volkswagen Group is looking for a partner to develop an entry-level EV, German publication Handelsblatt reported, citing sources, adding that the carmaker is in “very early” talks with Renault on the subject. Volkswagen and its partner firm – which is yet to be decided – could produce a combined 2,00,000-2,50,000 cars per year, added the newspaper. Spokespeople for Renault and the Volkswagen Group declined to comment, according to our sister publication Autocar UK.

Each firm has already detailed its own plans to produce an affordable, mass-market EV, with Volkswagen looking to launch the ID 1 in the coming years and Renault developing a production version of the reborn Twingo concept. Volkswagen Group chief financial officer Arno Antlitz had said in June that the German giant was working “full steam ahead” to develop an EV priced at around €20,000 (approximately Rs 18 lakh).

The VW ID 1 was planned to use an all-new architecture, with Skoda understood to be playing a key role in this platform’s development, but little detail is yet known. The future of the VW ID 1 project has more recently faced uncertainty. In November, Volkswagen Group CEO Oliver Blume told a conference in Berlin that he believed it would be possible to produce an entry-level EV by the second half of the decade but that VW had yet to make a final decision on the project. The firm is currently undergoing a wide-reaching cost-cutting initiative: brand's boss Thomas Schafer is reported to have announced a three-year programme to save €10 billion (over Rs 87,000 crore), with measures including job cuts.

On the other hand, the next Renault Twingo is tipped to become a production car by 2026 and will be positioned as a budget city EV, primarily for Europe. Key to this low cost will be a focus on efficiency (Renault claims the Twingo will yield 6.2mpkWh), rather than a large battery.

The use of the Renault Group's Ampr Small platform (previously called CMF-BEV) should help to further reduce its price, with economies of scale provided by its use under the upcoming Renault 5, Renault 4 and Nissan Micra EV.

However, Renault Group chief Luca de Meo has hinted that the French firm could use an outside partner to help develop the Twingo. He said: “We're confident in its potential to be a real game‑changer because we know we have a great track record with these kinds of projects... Last but not least, we have ongoing discussions with OEM partners to share the development costs."

He hinted that the Twingo could help Renault win over buyers who might otherwise consider Chinese cars, with technology and infotainment suited to tech-hungry buyers.