Volkswagen is cutting prices and introducing more affordable trim levels of its electric cars in Europe to better compete with Tesla and other EV makers on the Old Continent. That’s despite the fact that Volkswagen Group’s CEO, Oliver Blume, said last year that the carmaker won’t get into a price war with Tesla.
The German automaker is hoping to gain more sales in several European countries after introducing lower-priced versions of its ID.3, ID.4, and ID.5 EVs that are eligible for local incentives.
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Volkswagen enters the EV price war in Europe
Volkswagen, maker of the ID.4 and ID.5 EVs, has lowered the prices of its battery-powered cars in Europe in hopes of gaining more sales. The decision goes against what VW Group CEO Oliver Blume said last year, when price cuts were out of the question.
In France, the changes made by Volkswagen mean that almost all versions of the ID.3 hatchback, as well as the ID.4 and ID.5 crossovers, will be eligible for a government bonus of 5,000 to 7,000 euros (roughly $5,500 to $7,700), according to Automotive News Europe.
The cheapest new ID.3 version in the country is available in a so-called ID trim (confusing, we know–the ID.3 ID), which starts at 39,990 euros (about $43,800) and includes a 58 kilowatt-hours battery.
In Norway, a country that’s leading the pack in the EV adoption game, with 82% of new car sales represented by battery-powered vehicles, Volkswagen significantly lowered the price of the ID.3 from 500,000 krona (roughly $48,500) to 358,000 krona ($34,750).
In its home market of Germany, Volkswagen is doing a similar deal to that offered by General Motors in the United States, in the sense that it’s funding EV subsidies out of its own pockets after the German government cut EV incentives. Here, an ID.3 starts from 39,995 euros, or about $43,800 at today’s exchange rate.
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Similar deals are available in Belgium and Sweden for most of the ID lineup, and it’s all because of slow sales on the Old Continent. In October of last year, VW Group executives said that orders for EVs had slowed significantly but that, even so, it would stick to its pricing strategy despite other automakers going down the opposite direction.
In 2023, VW Group CEO Oliver Blume said that Volkswagen would not get into a price war with Tesla after the American EV maker applied significant discounts to the Model 3 and Model Y at the end of 2022. “We have a clear pricing strategy and are focused on reliability,” Blume told Frankfurt Allgemeine Sonnetagszeitung. “We trust in the strength of our products and brands,” he added.
But things didn’t quite go to plan for the German automotive giant last year, with VW brand CEO Thomas Schaefer going on record toward the end of last year saying that the company was no longer competitive and that things needed to change. The automaker paused production of its electric cars several times and cut shifts at its EV factory in Zwickau, Germany.
On the EV front, Volkswagen is lagging behind Tesla by a wide margin in Europe. In the first nine months of 2023, the best-selling car was the Tesla Model Y, with a little over 180,000 units sold on the Old Continent, while the Volkswagen ID.3 saw just 60,000 sales in the same period, according to DataForce’s numbers via Automotive News Europe.
