After a challenging year in 2024, Volkswagen is back on track and making big waves in Europe. In fact, the German automaker outsold Tesla in the first quarter of 2025—a milestone that highlights its resilience. Yet when it comes to electric vehicles, VW still has some work to do. The key to its comeback? A cutting-edge switch to lithium-iron-phosphate batteries, better known as LFP.
LFP batteries aren’t new to the market—Tesla, Ford, and Stellantis have already tapped into their potential. But VW’s decision to adopt this chemistry for its upcoming ID.2 city car marks its first major push in Europe. The ID.2, arriving in 2026, is set to rival the Renault 5 E-Tech and will be the brand’s inaugural EV equipped with LFP cells. This pivot could change the game for price-sensitive buyers.
Lowering Production Costs with LFP Chemistry
One of the biggest draws of LFP batteries is their lower cost compared to the nickel-manganese-cobalt (NMC) packs that dominate today’s EVs. The raw materials behind LFP—lithium, iron, and phosphate—are more abundant and less volatile in price. As lithium prices continue to drop, VW expects production savings to pile up, translating into more affordable sticker prices for customers.
According to insiders at Autocar, VW aims to offer the ID.2 for under €25,000 (before any ecological incentives). That’s a significant drop from current entry-level EV prices in Europe. With manufacturing expenses cut on the battery side, VW can either absorb the savings or pass them on to consumers—an attractive prospect in a market where affordability is a major roadblock to EV adoption.
Balancing Energy Density and Affordability
Of course, there’s a trade-off. LFP batteries have slightly lower energy density than their NMC counterparts, which can translate to shorter driving ranges. But VW is tackling this head on by integrating a new unified battery architecture known as “cell-to-pack.” This design slashes internal components, reduces weight, and optimizes space, so the overall pack can store more energy without adding bulk or cost.
Cell-to-pack isn’t just jargon—it’s a real step forward that could help the ID.2 achieve competitive range figures despite its LFP heart. And as the technology matures, density gaps will continue to shrink. By leaning into smart engineering, VW is aiming to give buyers a terrific balance of range, performance, and value.
Platform MEB+ and What’s Next
The coming ID.2 will ride on VW’s updated MEB+ platform, a refinement of the modular electric toolkit found under models like the ID.3, ID.4, and ID.7. CEO Thomas Schäfer has confirmed that MEB+ won’t be retired; instead, it will be rolled out across the lineup, outfitting more models with LFP cells over the next few years.
MEB+ promises better charging speeds, improved thermal management, and an uptick in range compared to the original MEB. In Schäfer’s words, adopting LFP on this platform is “a major step forward in cost and performance.” Thanks to this evolution, every EV in VW’s stable can become more economical to build and more compelling to drive.
Design Refresh and Market Impact
Alongside the technical upgrades, VW’s EVs are getting a design makeover. The once-bold styling that some deemed polarizing is being toned down in favor of cleaner, more mainstream looks. Think subtle Golf influences on the ID.2 and an understated, “timeless” aesthetic for the forthcoming ID.1. This shift is designed to attract customers who prefer classic silhouettes over futuristic flourishes.
By pairing familiar design cues with smart battery tech, VW hopes to address two of the biggest critics of its EV line: style and price. The rollout of LFP-powered vehicles on MEB+ could not only widen VW’s customer base but also put sustainable mobility within reach for a lot more people. And that’s the kind of revolution that can actually reshape the electric car market—one affordable, well-designed model at a time.
