The talks with Renault are in their nascent stages and may not necessarily lead to a definitive partnership, reported Reuters, citing Germany's Handelsblatt newspaper.

The joint goal with any partner would be to manufacture 200,000-250,000 vehicles annually, the report read.

A spokesperson for Renault emphasized the importance of cooperation in competing effectively in the small-entry electric vehicle segment while confirming different ongoing discussions, according to the report.

European automakers, including Volkswagen and Renault, are increasingly focused on introducing more affordable electric vehicles. The shift comes as they face stiff competition and lower-priced Chinese models.

Citing JATO Dynamics, a research firm specializing in autos, Reuters reported the average retail price of an electric vehicle in Europe exceeded €65,000 in the first half of 2023, compared to about €31,000 in China.

Renault recently launched a new electric version of its Twingo model, named Legend, priced under €20,000. Meanwhile, Volkswagen announced in March the development of an all-electric vehicle for around €25,000, set to launch by 2025, as per the report. 

Price Action: VWAGY shares are trading higher by 0.19% at $13.35 on 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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