Volkswagen’s diminutive electric vehicle, the ID.3, has witnessed a surge in Chinese demand after the German automaker slashed prices significantly last month.
China drives VW ID.3 demand as prices plummet?
Volkswagen’s strategic three-way partnership with SAIC, dubbed VW-SAIC, has unveiled a limited-time offer for the Chinese market, introducing a new supply of VW ID.3 units starting early July.
The historic low-value inventory commenced at approximately $17,500 or 125,900 yuan, persisting until the end of the month. As Volkswagen’s dominance in China’s automotive sector waned, the industry transitioned towards electric vehicles, prompting the company to reassess its position.
Byd, China’s largest electric vehicle manufacturer, surged past Volkswagen to become the top-selling automaker globally for the first quarter of the year, widening its lead by the halfway mark.
At Volkswagen’s annual shareholder meeting in Wolfsburg, Germany, investors expressed concerns about the company’s ability to keep pace with rapidly growing Chinese electric vehicle (EV) manufacturers such as BYD and Tesla.
Volkswagen Group’s CEO, Oliver Blume, announced that the company plans to reclaim market share by partnering with local suppliers to develop electric vehicles tailored specifically to meet the demands of Chinese customers. Moreover, VW is investing EUR 1 billion to ascertain a brand new enterprise and improvement middle, “100percentTech&Co,” to hurry up EV improvement by 30%.
To date, the price cuts have been effective in stimulating demand, as SAIC-Volkswagen announced that ID.3 orders surpassed 10,000 units last month.
The Volkswagen ID.3, dubbed the “electrical sizzling hatch” by the manufacturer, leverages VW’s MEB platform to deliver an impressive range of up to 450 km (279 mi) on a single charge, courtesy of its 57.3 kWh battery pack. With a rear electrical motor delivering up to 170 horsepower and 310 Newton meters of peak torque.
Electrek’s Take
While the ID.3’s initial success is impressive, the question remains: can Volkswagen sustain this momentum without compromising its bottom line? With over 10,000 pre-orders, it’s crucial to balance supply with demand and maintain a competitive edge in the electric vehicle market.
Within China’s borders, local electric vehicle manufacturers like BYD are disrupting the market with affordable options, such as the BYD Dolphin, priced from 116,800 yuan (approximately $16,100), and the Yuan Plus electrical crossover, starting at 134,000 yuan ($18,500). This has created a significant hurdle for international automakers like Volkswagen to overcome.
Volkswagen must choose between sustaining its cost advantage at the expense of profitability or risking market share by absorbing increased expenses.
Meanwhile, BYD’s momentum shows no signs of slowing down, as it logs a staggering 260,000+ new electric and hybrid vehicle sales in just one month, July. The electric vehicle manufacturer acquired nearly 30,000 Dolphin EVs in May, a staggering eleven times the number of ID.3 units purchased during the same period.
