UPDATE 12/27: A Ford spokesperson provided the following comment to Autoblog:

“There are no plans to offer an all-electric Mustang based on VW's MEB architecture. We remain on track to offer one MEB-based fully electric car for our European customers and are considering a second vehicle. Beyond that, we don't comment on speculation about future products."

Our original post follows:

Earlier this year we learned that VW would share its electric MEB platform with Ford as a part of an alliance between the two automakers. A new report from Auto Express suggests a possible use for this small electric car platform: a baby Mustang Mach-E.

There’s a whole lot to unpack here with this rumor, and Ford of Europe’s chief designer Murat Gueler stoked the flames when speaking to Auto Express. “The Mustang influence wasn’t considered until an earlier direction with the car wasn’t really working. Once we introduced Mustang as inspiration, it came together quickly. We’re really excited by what this brings to the electric car, and yes we have already talked about expansion, to some sort of family,” Gueler says.

The “expansion” of the Mustang brand is the bit to focus on here. Gueler didn’t specifically say that the expansion would result in a smaller Mustang Mach-E, but he did say it would almost certainly be a crossover with a different profile than the recently revealed Mach-E. Assuming the use of the MEB platform, Gueler is definitely talking about a baby Mustang Mach-E.

The report goes on to say that Ford met with VW in November this year to discuss how it could use and modify the MEB platform for Ford’s own use. One area that Ford keyed on in these talks is the position of the front bulkhead and cowl. VW has positioned the base of the windshield very far forward for the MEB platform, which forces a relatively short hood. Of course, that short hood design doesn’t work for Ford if it wants to call this crossover a Mustang. It would be incredibly difficult or impossible for Ford to design a car with the profile and proportions one expects from a Mustang without modification. However, it sounds as if Ford might have what it wants from VW, according to Ted Cannis, Ford’s global director of electrification.

“It’s key that we have enough flexibility, and it’s important to have enough differentiation and the kind of performance you expect from a Ford. A lot of that was done in the early part of the negotiations with VW. The parameters that we’ve seen, we can make a great Ford,” Cannis says.

Of course, Ford is still a year away from launching sales of the Mustang Mach-E. True demand for the electric performance crossover, therefore, is still a mystery, so Ford would be making a pretty large bet on extending the Mustang brand even further. There’s another major red flag with this idea, too. If Ford were to go through with the idea as Auto Express suggests, there would be a Mustang-branded crossover on the road that is essentially a Volkswagen underneath. Ford would be borrowing the Volkswagen MEB platform and attaching a Mustang Mach-E-looking body to it. Even if the idea of a Mustang crossover ruffled your feathers to begin with, it is at least a Ford-made and Ford-developed product. This idea strays even further from the original American icon.

Then, there’s the weirdness of having two different Mustang Mach-E vehicles on completely separate platforms. They would likely look similar but be totally different underneath. The average crossover buyer might not care, but it sure does seem odd to us. The silver lining to the idea is that electric powertrains are not essential to a vehicle’s character and personality in the same way an internal combustion engine is. This makes the idea of using VW electric motors in a Mustang crossover slightly more palatable than using VW’s 2.0-liter turbocharged four-cylinder in a traditional Mustang coupe. Still, perception matters, and we’re sure Ford is fully aware of this.

As for the performance we could expect out of such a creation, the MEB platform can support rear-wheel drive and all-wheel drive. Power from the electric motor(s) would likely be enough to qualify it as a Mustang — think 300-horsepower-plus. And while official EPA-rated range isn’t available for any MEB platform car yet, the ID.3 is good for up to 342 miles of range on the European WLTP cycle.

We’re slapping the Rumormill label on this one for the time being, though. The flexibility of the MEB platform is still a question mark, and Ford hasn’t explicitly committed to anything we know of yet. We asked for comment from Ford to see if it has anything more to add, but were offered no comment in response. If Ford loses the Mustang name from the car, much of the controversy and need for change falls away. It only makes sense for Ford to use this platform that VW has sunk billions into if it can with the alliance. We’ll see how it plays out as Ford wades into the world of electric vehicles.