Volkswagen (VW) and Renault have recently ended talks to jointly develop an affordable electric version of the Twingo car, according to sources familiar with the situation. Here are the key points:

1. Background:

   - The collapse of negotiations between VW and Renault could mean that VW may have to develop its own affordable electric vehicle (EV) without a partnership.

   - Renault, on the other hand, will continue designing its electric Twingo, which is scheduled to hit the market in 2026.

2. Cost-Cutting Efforts:

   - Both VW and Renault had hoped that sharing the work would help cut costs, which is a significant challenge for European carmakers facing competition from cheaper Chinese cars.

   - However, the talks fell apart, and VW decided to go its own way in developing an affordable EV.

3. Reasons for Talks Breaking Down:

   - Volkswagen's works council played a role in the negotiations falling apart.

   - Renault wanted to build the jointly developed electric Twingo in one of its plants, while VW was seeking to fully utilize its European production network.

4. Implications:

   - A potential partnership between VW and Renault would have brought together two household names from Europe's top economies, forming a counterweight against Asian rivals entering the local market.

   - The breakdown of talks is also a blow to Renault's CEO Luca de Meo's hopes for greater cooperation among European carmakers against Chinese competitors.

5. Next Steps:

   - VW sources indicate that a decision on the EV plan is expected within weeks.

   - Renault will continue working on the Twingo independently but remains open to other partners, such as those within the alliance with Nissan and Mitsubishi.

In summary, while the VW-Renault collaboration did not materialize, both companies will continue their efforts in the electric vehicle space, albeit separately.