Volkswagen’s decision to cut costs last month has triggered a significant increase in demand for its ID.3 model. The significant decline in ID.3 values had a profound impact last month, resulting in an astonishing 300% surge in gross sales.
Chinese demand for Volkswagen’s ID.3 electric vehicle surges by 300% following price adjustments?
Volkswagen slashes prices on its compact ID.3 electric car in early June, offering a temporary “value-for-money” promotion.
China’s joint venture between the German automaker and SAIC saw cost savings of 16%, resulting in a refreshed starting price of approximately 119,900 yuan, or $16,600, down from the original 142,900 yuan, equivalent to around $19,800.
The value-driven cuts are having a significant impact on VW’s regional gross sales. Volkswagen’s ID.3 electric vehicle saw a remarkable surge in demand in July, with gross sales jumping 305% to 7,378 units, up from just 1,819 units in June.
Signifying a significant milestone, not just month-over-month growth but also the first instance where the ID.3 has surpassed 5,000 in monthly sales since its inception in 2021.
The worth cuts arrived swiftly after Volkswagen lost ground in the Chinese market, once its stronghold. Electric vehicle manufacturers in the region, comparable to BYD, Tesla, NIO, and their peers, continue witnessing increasing demand.
Volkswagen’s investors were quick to express concerns over the company’s disappointing electric vehicle (EV) sales in China, its biggest market, during a basic assembly in Cologne.
By mid-year, BYD had already eclipsed Volkswagen’s initial three-month passenger vehicle sales figures, solidifying its market dominance by June.
SAIC-Volkswagen unveiled two iterations of the ID.3, with the entry-level variant starting at 119,900 yuan (approximately $16,600) and the premium version priced at 149,900 yuan (around $20,800). Powered by a single rear-mounted electric motor generating 170 horsepower (125 kilowatts) and 310 Newton-meters of peak torque. The ID.3 is equipped with a 57.3 kWh battery pack, which enables a range of approximately 450 kilometers (280 miles) on the China Light Load Cycle Test (CLTC).
Volkswagen’s electric vehicle (EV) offerings in China mainly comprise the ID.3, ID.4, and ID.6 models. Varying demand for the electric vehicle (EV) lineup within the region led to divergent sales performances, as 4,031 ID.4 models and 1,513 ID.6 units were sold last month.
Electrek’s Take
Will Volkswagen follow suit and apply similar price cuts to its other models in the region after witnessing a surge in ID.3 sales following recent value adjustments? Can they truly afford to?
The automaker confronts intense competition from models such as the BYD Dolphin and Yuan Plus EVs that currently dominate the Chinese market. Starting at 116,800 yuan ($16,200), the BYD Dolphin offers an affordable entry point, while the Yuan Plus starts at a more premium price of 134,000 yuan ($18,600).
Despite achieving significant sales, the ID.3 model still trailed behind the Dolphin (21,800) and Yuan Plus (23,594) in terms of gross sales in July.
