(Bloomberg) -- Volkswagen AG will go it alone and develop electric cars priced at €20,000 ($21,756) in Europe, deciding against partnering with peers in the struggle to compete with cheap models from China.

The German manufacturer plans to unveil its proposals for affordable compact EVs in 2027, it said Tuesday.

“Despite the attractive price, our electric cars will set standards in the entry-level segment in terms of technology, design, quality, and customer experience,” Thomas Schäfer, who heads the group’s volume brands, said in a statement.

Europe’s carmakers are under pressure to update their lineups just as slow economic growth and waning subsidies weigh on EV demand. Meanwhile, Chinese brands are expanding in the region with cheaper models. BYD Co., which is weighing two plants in Europe, plans to offer its Seagull hatchback already next year at a price below €20,000.

Read More: China’s $10,000 EV Will Undercut Europe’s Biggest Carmakers

Volkswagen has had plenty of setbacks developing EVs, with protracted software issues irking drivers and delaying key models. In China, VW has excelled on combustion-engine cars but fallen behind local brands on EVs because its offering failed to cater to local tastes.

Renault SA has held talks with peers on possibly working together to build affordable EVs, but the discussions haven’t led to any partnerships.

Read More: The Big Miss on EVs Is Remaking Europe’s Auto Industry

In its initial push toward more affordable EVs, Volkswagen plans to present four battery-powered priced below €25,000 as early as the end of next year. Those vehicles will be built in Spain.

For the €20,000 project, VW will rely “on a high degree of localization in Europe,” the company said, adding that the push will require political support and competitive framework conditions.

Stellantis NV earlier this month said it will sell cars co-developed with a Chinese partner in Europe from September as it tries to lower the cost of its electric offerings. 

Volkswagen Chief Financial Officer Arno Antlitz in March warned that making a profit off budget EVs is “very difficult.”

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