Volkswagen’s smallest electric car, the ID.3, is seeing more orders in China following significant price cuts implemented last month.
VW ID.3 orders soar after price cuts in China
Volkswagen’s joint venture with SAIC (VW-SAIC) announced a new limited-time offer on the VW ID.3 in China at the beginning of July.
The “historical low price” offer started at 125,900 yuan (roughly $17,500), lasting until the end of the month. The move came after Volkswagen, once a dominant force in China’s auto industry, watched its lead slip as the market transitions to electric vehicles.
BYD, China’s largest EV marker, surpassed Volkswagen in passenger car sales in the first three months of the year, extending its lead through the first half.
At VW’s general meeting in May, shareholders questioned the automaker’s plans to keep up with rising EV makers in China like BYD and Tesla.
CEO of Volkswagen Group, Oliver Blume, said the automaker would win back market share by collaborating with local partners to build EVs designed for Chinese buyers. Furthermore, VW is investing EUR 1 billion to establish a new business and development center, “100%Tech&Co,” to speed up EV development by 30%.
The price cuts are working so far to generate demand, with SAIC-VW reporting ID.3 orders exceeded 10,000 last month.
The ID.3, or the “electric hot hatch,” as VW calls it, is based on the automaker’s MEB platform, offering up to 450 km (279 mi) CLTC range with a 57.3 kWh battery pack. A rear electric motor supplies up to 170 hp and 310 Nm peak torque.
The ID.3 price cuts generated a spark for VW with over 10K orders, but how long can the automaker keep it on the market at those prices?
EV makers in the region, like BYD, are offering low-cost EVs, like the BYD Dolphin, starting at 116,800 yuan ($16,100), and the Yuan Plus electric crossover, starting at 134,000 yuan ($18,500), making it hard for foreign automakers like VW to compete.
VW now faces a decision – keep the prices low and continue to take a loss on margins, or raise prices and risk losing sales share.
Meanwhile, BYD continues surging, with over 260K new energy vehicles (including hybrids) in July alone. The EV maker sold nearly 30K Dolphin EVs in May, about 11 times that of the ID.3.