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Volkswagen’s Answer To Tesla: A €20,000 Electric Car

Volkswagen (VLKPF) wants to offer an entry-level electric car for less than €20,000 ($22,700) and is planning on converting three of its factories in Germany to focus on electric challengers to Tesla (TSLA), Reuters reports.

VW is aiming to produce 200,000 of the new electric car, known as the “MEB entry”, in its factory in Emden. Coupled with this, the German car giant is also aiming to build 100,000 of the I.D. Aero in a plant that currently makes the VW Passat.

According to Reuters, the plan will be discussed at a supervisory board meeting on Nov. 16.

The German carmaker is also expected to discuss its alliances with battery cell manufacturer SK Innovation and rival Ford (F) at the strategy meeting, which will focus on VW’s electric future.

Volkswagen, like all established automakers, is spooked by the success of upstart electric challenger Tesla, but it’s also still paying penance for the sins of Dieselgate. As cities start to ban diesel vehicles, German carmakers are desperate to save 600,000 industrial jobs, of which 436,000 are at car companies and their suppliers.

Volkswagen has plans for nearly 30 electric cars based on a platform it calls the modular electric drive matrix, or MEB, to be in production by 2022. The company stresses that its MEB platform is “not a platform for vehicles with combustion engines that has been retroactively modified,” but is instead designed from the ground up for an all-electric future.

The first car in the lineup, the I.D. Neo, will be made in Zwickau, Germany and go on sale in 2020.

At the same time the ID Buzz electric van is set to be built at VW’s plant in Hannover, where its T6 Van is made, the source told Reuters. To free up production capacity in Hannover, VW’s transporter vans could be produced at a Ford plant in Turkey if German labour unions agree to it. Reports also say it’s possible that Volkswagen could license its MEB architecture to Ford.