I don't think VW, or any German Car brand for that matter, really wants to sell small (electric) vehicles anymore.
VW desperately wants to cancel the Up! in Europe in favour of SUVs, BMW cancelled the i3 a long time ago and only introduced either EV land yachts or giant EV SUVs since then. Mercedes just launched a new Smart EV (which is actually a Geely) but it's not exactly small.
They don’t make them, how can you seek what you don’t make? They purposefully made less of them and said no one bought them so we’ll keep making giant (expensive) SUVs instead, plus those are easier to make due to the more lenient rules on large “utility” vehicle emissions
US vehicle size is currently driven by broken EPA rules regarding emissions per wheelbase which strongly encourages larger vehicles. It seems to be affecting EVs as well, but not sure why.
The forced people to buy models that could pass emissions regulations easier, which meant less r&d for few models that didn’t get much change, and they happened to be able to charge more due to size as well. Win/win/win for everyone other than all the dead kids that got ran over because Karen’s and Kyle’s can’t see past the football field of a hood and the grill is 5.5 feet tall