SEAT loses VW Group small-EV project

4 May 2020

Volkswagen Group (VW) is reconsidering which of its brands will launch a range of electric city-cars after Spanish brand SEAT lost the project, as reported by Automotive News Europe.

With plans to ramp-up production of electric vehicles (EVs) across its brands, VW expected SEAT to develop the smallest models based on a shortened version of its MEB platform. The car would cost less than €20,000 and would have replaced the VW Up!, SEAT Mii and Skoda Citigo citycars.

However, with the coronavirus (COVID-19) pandemic causing global economic problems, SEAT’s partnership with Chinese carmaker JAC, which was believed to be helping develop the car, is looking perilous as demand in the country slumps. Taking on such a large and important project for VW in the current circumstances is therefore no longer an option, according to the German group.

There are also issues with the development of the MEB platform for a small vehicle. The underpinnings are currently used on the ID.3, which is being readied for a summer launch. The smaller base would need to feature some radical changes, with engineers looking into shrinking key drivetrain components and using less steel in the construction. Safety considerations also need to be made, with the battery banks rotated 90-degrees to provide a better cushion should a front or rear impact occur. These changes need to be made while ensuring that the new small vehicle costs less than the ID.3.

Move in-house

It is likely that to ensure it can control the costs under strict supervision, the project will instead move to the VW brand itself, with the small car becoming the ID.1. Such a move will be a big loss for SEAT, which has been one of the group’s biggest profit generators in recent years.

However, with SEAT boss Luca de Meo leaving the brand to take over as CEO of Renault, VW’s confidence in the Spanish firm may have been shaken. It makes sense to ensure a new boss can keep the carmaker’s momentum before providing it with such an important project.

There is no discussion over the timescale of the project but, given the current global situation, any development will inevitably be delayed. With VW concentrating on development of the ID.4 as well as the launch of the ID.3, there are also questions around how much time it can give to planning a small electric city car as well.

Dealer models

Meanwhile, the carmaker has also extended its offer to move dealers to an agency sales platform for its MEB and PPE electric platforms, due to the COVID-19 pandemic.

The German carmaker announced in February that it was looking towards an agency model for EV sales across its Group brands, with sales partners given until the end of April to sign the contracts. This deadline has now been extended by a month, as dealerships start to reopen across Europe.

The new contract enables VW partners to sell the vehicles based on MEB and the premium platform electric (PPE). They do not sell the vehicles on their own account but act as agents. This means that the manufacturer provides showroom models, warehouses and vehicle finance. Dealerships will still act as sellers for internal combustion engine vehicles.