Volkswagen cuts the price of the ID.3 in China, starting at less than $18,000, to boost electric vehicle sales
Once considered a leader in China’s auto industry, Volkswagen has seen its share of the pie shrink over the past year or so, as electric vehicle makers like BYD, NIO and Tesla steal the spotlight. In an attempt to attract buyers, Volkswagen is reducing the price of its ID.3 small electric car.
For a limited time, Volkswagen will offer the ID.3 at a historically low price, starting at 125,900 yuan (about $17,500).
The ID.3 was the first of Volkswagen’s all-electric ‘ID’ model range which now includes the ID.4, ID.5, ID.6 (only in China), ID.7 and the ID.Buzz electric van.
After ending production of the e-Golf in 2019, the ID.3 sets Volkswagen on a new path to hit the market in July 2020 as one of the most anticipated electric cars of the year. The ID.3 compact electric car quickly climbed the sales charts to become the best-selling electric car in Europe before arriving in China in late 2021.
Since arriving in China through SAIC-Volkswagen, the automaker has sold more than 130,000 units, among the best sales of electric vehicles in the joint venture.
However, it was not enough to hold on to its lead. At Volkswagen’s general meeting in May, shareholders were quick to bring up growing competition from electric vehicle makers in the region such as BYD and Tesla.
China’s auto market is rapidly moving toward electric vehicles, with one in four cars sold in the region last year being electric.
Volkswagen fell behind China’s BYD in passenger car sales during the first quarter, as demand for low-priced electric cars rose.
VW is dropping the price of the ID.3 in China for a limited time
To keep up with competition and stimulate demand, SAIC-Volkswagen announced on Friday that it will launch a limited-time offer on the ID.3.
From now until July 31, 2023, buyers in China can purchase the VW ID.3 electric car starting at 125,900 yuan (about $17,500).
The ID.3, Volkswagen’s smallest electric car, is manufactured at SAIC-Volkswagen’s new energy plant in Shanghai. Based on Volkswagen’s MEB platform, the ID.3 offers a 450 km (279 mi) CLTC range starting from a 57.3 kWh lithium-ion battery pack. A rear electric motor delivers power of up to 170 hp and maximum torque of 310 Nm.
SAIC-Volkswagen also unveiled a new electric sedan concept, the ID.Next, at the 2023 auto show, which is the automaker’s version of the global ID.7, which was released in April.
To avoid further price wars in China, Volkswagen’s other joint venture in China, VW-FAW, was one of more than a dozen automakers recently helped facilitate a pledge to maintain fair competition and pricing in the region.
Volkswagen faces stiff competition in China, where low-cost rival BYD and electric vehicle leader Tesla have gained market share.
The automaker’s overall sales fell 3.6% last year and continued into 2023. Volkswagen sold just over 11,300 electric vehicles in China in May, representing 2.9% of the market, down from 3.2% last year.
The ID.3 has had trouble keeping up with competitors like the BYD Dolphin, with a starting price of 116,800 yuan ($16,100) and the Yuan Plus with a starting price of 134,000 yuan ($18,500).
The new offering puts the ID.3 at a competitive price, but will Volkswagen still be able to compete with BYD? The automaker sold nearly 30,000 Dolphin EVs in May, nearly 11 times the number of the ID.3. Likewise, Yuan Plus achieved sales of over 26K in May.
Volkswagen pledges to work with its local partners to regain market share with electric vehicles designed for Chinese buyers. We will see if supply can stimulate demand. If so, I expect more shows to come.
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