Volkswagen AG (OTC:VWAGY) has reportedly exited discussions with Renault SA (OTC:RNSDF) (OTC:RNLSY) about collaborating on an affordable electric version of the Twingo car.
This development represents a challenge for European car manufacturers as they strive to compete with more cost-effective Chinese alternatives, reported Reuters.
Despite several months of negotiations, the two companies could not reach an agreement. Reuters said one source mentioned that a deal was close, but ultimately, Volkswagen decided to proceed independently.
The report further noted Renault would continue to develop its electric Twingo, slated for release in 2026, without Volkswagen's involvement, but also remained open to other partners, including those within its alliance, such as Nissan Motor Co Ltd (OTC:NSANY) and Mitsubishi Motors Corp (OTC:MMTOF).
On the other hand, Volkswagen is expected to finalize its own strategy for a low-cost electric vehicle soon, with a target launch by 2027.
Related Read: Honda Commits $65B To Electrification By 2030
This setback is a blow to Renault CEO Luca de Meo's vision of fostering more collaboration among European car manufacturers to better compete against Chinese competitors, the report mentioned.
Chinese automakers, the world's leading producers of electric vehicles, are rapidly gaining market share in Europe.
This competition pressures established European companies like Renault and Volkswagen to reduce costs and accelerate the development of new models.
European manufacturers aim to offer smaller EVs priced under €20,000 to better compete with Chinese brands such as BYD Company (OTC:BYDDY) (OTC:BYDDF).
Price Action: VWAGY shares are trading lower by 1.48% at $15.09 at the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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