Volkswagen has been clear about its aims for its generation of affordable electric vehicles, denoted by names starting with "ID" and underpinned by the automaker’s flexible, modular MEB architecture: Electric cars for millions, not millionaires.
So it shouldn’t come as much of a surprise that the Volkswagen ID.4, the first of these models bound for the U.S. and due to arrive before the end of the year, is positioned not to take on the Tesla Model Y but instead to offer an alternative to a set of vehicles that each outsell the Model Y by nearly an order of magnitude: the Honda CR-V, the Toyota RAV4, or the Chevrolet Equinox, for instance.
That compact crossover SUV segment encompassing those models remains one of the fastest-growing and bestselling portions of the U.S. auto market.
“While we certainly looked to Tesla for inspiration on the customer experience, we’re certainly not looking to their customer base as our playing field,” Duncan Movassaghi, the executive vice president of sales and marketing at Volkswagen of America, said Wednesday.
The ID.4 will offer “a lot of what Tesla offers at a much lower price point,” but the more critical point, he said, is that it’s positioned as a choice for the 4 million Americans who buy a vehicle in that mainstream segment. “And that for me is how we break through; that’s how we really open up electrification for the millions.”
Teaser for Volkswagen ID 4 debuting in September 2020
“We've got a car which is not a compromise, which really, in terms of its styling, its driving, its packaging, and importantly its price, really works for the average American,” he said. “If you're driving a RAV4, if you're driving and CR-V, this car is a great alternative.”
Tesla look, with dealership process
Movassaghi said that while VW sees how one of the many reasons Tesla has been successful is its straightforward online buying process, it’s not interested in replicating that process entirely. “We want to do this with our dealers; we believe that they offer an advantage for us.”
So Volkswagen of America formed a subcouncil with dealers early on. It’s helped subsidize marketing costs, and it’s made agreements with dealers on how it will allocate cars—and that each store will be staffed with at least one EV expert. And from the start, it recognized the idea that those who buy and lease ID.4 will have some widely varied ideas of how much they want to do the buying process in person.
The result is an interface that considered Tesla plus a host of build/order experiences outside the auto industry. It aims to be clean and seamless, offering as much of the process online as you want and then a handoff to the dealer for the final details and/or delivery.
To help shoppers and dealerships, the ID.4 initially will be offered in a simplified range with a limited number of builds.
”It’s very simple; you make a couple of choices, you hit reserve, and you can go.” said Caleb Dunn, the product development manager overseeing the U.S. consumer interface.
Volkswagen ID.4 builder preliminary mock - August 2020
On the surface, the emphasis will be on the basics that matter, like a mock-up of the current build plus price, range, and charging. On a deeper level, there will be calculators to help estimate savings by going electric, or to figure monthly payments. Home charging options will be available at any point in the process, but VW couldn’t yet provide details on if and how it will be wrapped in with financing.
Under VW’s dealer-franchise system, dealerships are a necessary part of the process. They’ll be able to see information on orders placed and help customers as needed.
The ID.4 will be reserved first with a $100 deposit, then with an additional $400 deposit at the time you build and spec a vehicle, to lock it in. Both amounts are fully refundable, but it’s VW’s way of getting shoppers to commit while also giving them some flexibility.
Dealers also remain “the final arbiter of the transaction,” Movassaghi said, which doesn’t preclude dealerships from marking vehicles up even if the reservation indicated a different price.
While subsidized leases are common for electric vehicles—even for new or recently released vehicles—Movassaghi said that with the price point that VW is planning for, plus federal and state incentives, it can offer attractive leases as well through its captive finance company, VCI.
VW ID.4 reservaton screen
As we’ve covered before, VW has hinted that the price point for ID.4 will be very close to that of a comparable gasoline vehicle after considering the $7,500 federal EV tax credit.
Can VW build as many as it can sell?
Also, it might be a little premature to anticipate your town’s VW dealership packed with electric vehicles. That will likely happen, just not so soon.
While production of the ID.4 will ramp up in the U.S. in 2022, a portion of production from Zwickau, Germany, will be designated for the U.S. until then. And according to Movassaghi it’s still working with VW AG “to get the very best allocation we can to the U.S. market.”
2020 Volkswagen ID 3 production at plant in Zwickau, Germany
If it weren’t for Volkswagen’s post-diesel-scandal contract to get its EVs out, that would be a point of concern and skepticism. Several other major global automakers have promised appealing electric crossover models (like the Kia Soul EV and Mercedes-Benz EQC, among others) to the U.S. and then, mere months from arrival, opted to allocate more of them for Europe instead.
In any case, the ID.4 hits California ZEV states first—likely in December—but after “those few hundred cars,” within a month, the rollout will extend nationwide, Movassaghi assured.
Ultimately it’s supply and demand. And at this price and for this type of vehicle, it’s uncharted territory.