SPANISH car maker SEAT has announced plans to shake up the electric vehicle market with a new urban vehicle that could be priced below £20,000.

The company set out its plans to produce more than 500,000 EVs a year and the new model should be on the road by 2025.

And it is likely the new urban model will also be used by other marques in parent group Volkswagen's line up which include Audi, Skoda and VW.

SEAT also confirmed that its performance brand Cupra would be launching its second all-electric vehicle the Tavascan in 2024 while the new urban vehicle will be priced from around 20,000 to 25,000 euros.

The announcements were made at its annual conference where an ambitious plan, called Future Fast Forward, was revealed with a key pillar being the production of urban electric vehicles in Spain from 2025.

SEAT president, Wayne Griffiths said:"We want to manufacture electric cars in Spain starting in 2025. Our ambition is to produce more than 500,000 urban electric cars per year in Martorell also for the Volkswagen Group but we need a clear commitment by the European Commission."

The company aims not only to produce electric vehicles but also to lead the development of the entire project for the Volkswagen Group.

"Our plan is to transform our Technical Centre, the only one of its kind in southern Europe and an essential R&D asset for the region,"sdded Mr Griffiths.

"We've drawn up the plan, we have the right partners on-board and we're generally ready to invest. This project is intended to become the driver for the transformation of the Spanish automotive industry. The support of the Spanish Government and the EU Commission for this cross-sectorial and nation-wide plan is needed for the Volkswagen Group to be able to take the final decision on its execution."

During 2021, the Formentor SUV will be key to doubling Cupra's sales volume and will account for 50 per cent of sales, with half of Formentor sales predicted to be plug-in hybrid models.

The facelifted SEAT Ibiza and Arona will arrive also in the UK this year while the SEAT and Cupra PHEV range now stands at six models: the SEAT Leon, SEAT Leon Sportstourer, SEAT Tarraco, Cupra Leon, Cupra Leon Sportstourer and Cupra Formentor.

By the end of year, Cupra will launch its first 100 per cent electric car, the Born.