German auto giant Volkswagen is reportedly developing a cheaper electric car which it will sell of under 20,000 euros or $23,000. The company is also said to protect jobs in Germany by converting three of its factories to manufacture these cheap electric cars in the country.

If it’s able to put out an electric car that costs $23,000, it would undercut Tesla’s Model 3 by almost $12,000. The Model 3 is the cheapest electric car that Tesla sells. It’s the company’s first mass-market electric car.

A source familiar with VW’s plans told Reuters that VW’s cheap electric car plans are referred to as “MEB entry,” and the initial model may have a production volume of around 200,000 vehicles. The plan will reportedly be discussed at the company’s supervisory board meeting on November 16th. The meeting will discuss VW’s transformation plan to become a mass producer of electric cars from Europe’s largest manufacturer of combustion engine vehicles.

The source added that another Volkswagen electric car, the I.D. Aero, will be built in the factory where the company currently manufactures its Passat mid-sized sedan. Its I.D. Buzz electric van will reportedly be built at the company’s Hannover plant where the T6 Van is currently made.

This follows reports that Volkswagen and Ford are in talks for an alliance to develop self-driving and electric cars as well as to complement each other’s global product and sales footprints. The talks were said to be in an exploratory stage at that point so it’s unclear if and when a deal will be reached.

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