Volkswagen is planning $21000 subcompact e-car to challenge Tesla

Teaming up with peers to share costs marks a strategy shift for the German manufacturer, as cooperation efforts in the past have often been bogged down by cultural differences

Volkswagen AG plans to add a subcompact crossover costing about 18,000 euros ($21,000) to its all-electric I.D. range, expanding its lineup of zero-emissions vehicles that are more affordable than those of Tesla Inc., according to people familiar with the matter.

The entry level vehicle may be built at VW’s factory in Emden, Germany, said the people, who asked not to be identified because the plan hasn’t received final approval by the manufacturer’s supervisory board. Sales could start sometime after 2020, and the company expects to sell about 200,000 per year, they said.

That would put it on par with current production levels