Small electric cars may be unaffordable for some – from VW president to newspaper

BERLIN (Reuters) – The shift to electric vehicles will drastically increase the price of cars, which means they may become unaffordable for low-income people, said Volkswagen president (VOWG_p.DE) said in an interview published Sunday.

The German automaker is still shocked by the 2015 emissions testing scandal and must increase the production of electric vehicles to meet the emissions reduction targets issued by Europe.

"We are clearly aiming to make electromobility accessible to a large part of the population, that is, to make it affordable," Hans-Dieter Poetsch told the Welt am Sonntag newspaper.

But he said that it might be difficult to keep prices down for many entry-level vehicles.

"The current price level can not stay the same if these cars are equipped with electric motors," said Poetsch. "As a result, this will inevitably lead to significant price increases in the small car segment."

Poetsch spoke of more ambitious targets than expected to reduce greenhouse gas emissions from cars by 37.5% by 2030, which the European Union approved in December.

Volkswagen said in December that it may be necessary to step up its serial production projects for electric vehicles to achieve EU goals.

VW plans to spend nearly 44 billion euros on the development of the electric car, autonomous driving and new mobility services by 2023.