Germany’s Volkswagen AG unveiled its entry-level electric car, the ID.Polo, on Wednesday (September 3), with an expected price of less than €25,000, positioning it as a “people’s car.” This move is seen as Volkswagen directly taking on the low-price offensive launched by Chinese car companies such as BYD in Europe.
The compact hatchback will hit the market next year and will make its debut at the Munich Motor Show next week. Volkswagen has stated that the goal is to make “electric cars affordable for more people,” hence introducing the concept of a “people’s car” and announcing the change from numerical coding to using traditional fuel car names like Polo to create a more identifiable electric car series.
Volkswagen Brand CEO Thomas Schäfer emphasized, “Our model names are deeply rooted in people’s minds. They represent a strong brand, embody quality, timeless design, and accessible technology.”
This strategic move comes as Volkswagen faces multiple pressures: slowing growth in the European electric car market, declining sales in China, and increasingly strict trade barriers. At the same time, cheap Chinese cars are rapidly entering the European market, such as BYD’s Dolphin Surf hatchback launched in Germany with a starting price of only around €23,000.
Despite facing challenges, Volkswagen’s electric car sales in Europe still show promise. In the second quarter of this year, the group’s electric car sales in Europe grew by 73%, primarily driven by demand for models like VW ID.5, Audi Q4 e-tron, and Skoda Enyaq. Electrifying the Polo is seen as Volkswagen’s attempt to continue its success from the era of gasoline cars into the battery era.
Since its launch in 1975, Polo has sold over 20 million units and has long dominated the small car market.
Europe is responding to Chinese car companies through market competition, while in South America, the resistance is even stronger. According to reports from Reuters and the South China Morning Post, as Chinese cars flood into Brazil, local unions and manufacturers are urging the government to take measures to prevent the impact of “cheap subsidized products” on employment and the industry chain. A Brazilian government source revealed that they are considering raising import tariffs and may require Chinese manufacturers to establish local factories to enter the market.
Chinese car companies themselves are feeling the pressure. According to a previous report by Bloomberg, in 2024, the capacity utilization rate of China’s auto industry was only 49.5%, and even with a contraction in the number of manufacturers, the market remains oversupplied. Bank of America analyst John Murphy predicts that there will be “massive consolidation” in the future.
Even Chinese state media People’s Daily has warned in June that low quality and low prices could damage the overseas image of “Made in China” cars. When BYD slashed the starting prices of some models to as low as 55,800 yuan (about $7,771), it caused a general decline in car stocks. Criticisms questioning, “Why not wait a bit longer? It might get even cheaper,” have also circulated on Chinese social media platforms.