Volkswagen’s small and cheap electric vehicle, which will supposedly cost less than €20,000 (£17,500), could become a reality by the second half of the decade, the German automotive group’s CEO, Oliver Blume, said yesterday at a conference, quoted by Reuters.

As it stands today, Volkswagen has not yet made a decision on producing what is considered a spiritual successor to the e-Up! electric city car, but Blume is convinced the company can get there after 2025.

With this in mind, it looks like VW will fall behind its main competitors in Europe in the cheap EV race. Renault just announced the revival of its iconic Twingo nameplate in the form of a four-door urban EV that will be priced under €20,000 when deliveries start in 2026. Stellantis, which owns several European brands, also wants to get into the cheap electric car game with the help of Chinese manufacturer Leapmotor, which offers a pint-sized, £8,800 (RMB 79,500) in China.

Gallery: 2025 Volkswagen, Skoda, and Cupra entry-level EVs design sketches

There’s also the Chinese-made Dacia Spring and the recently launched, European-made Citroen e-C3, but these two go over the psychological threshold of €20,000 without factoring in incentives. The cheaper Citroen Ami / Opel Rocks-E / Fiat Topolino crew can also be thrown into the mix, but they’re considered quadricycles and only have seating for two people, so they’re not exactly continent cruisers.

Volkswagen does intend to launch the sub-€25,000 (£22,000) production version of the ID. 2all hatchback by 2025, which will reportedly feature a 280-mile (450-kilometre) range and will be able to recharge from 10 percent to 80 percent in around 20 minutes. However, the similarly-sized Renault 5 and Renault 4 are scheduled to debut in 2024 and 2025 respectively, forcing VW to play a game of catch-up.

The main barrier to lowering EV costs is the price of the batteries. But VW says it’s working on a unified battery cell that will cut costs in half, enabling it to bring cheaper cars to market.

"We have a responsibility to bring the right products at the right price onto the market," Blume said. "After early adopters were reached with electric cars, we now need consumers to be convinced by the technology, who don't have the opportunity to install a charging station at home."