Volkswagen ID.3 achieves major cost reductions
According to Herbert Diess, the chairman of the board of management of Volkswagen, the ID.3 is 40 % cheaper to build than the e-Golf.
The Volkswagen ID.3 uses the new MEB platform, exclusively made for electric cars, while the Volkswagen e-Golf uses the hybrid MQB platform made to allow multiple powertrains.
“If you focus on an electric platform, all in all it accounts for a 40% reduction against the predecessor electric Golf. Most of it from cells and the battery system. Around 5-10% comes from dedicating an entire plant to electric vehicles”.
This means that if the Volkswagen e-Golf is now profitable when sold for 31.900 euros in Germany, the Volkswagen ID.3 would also be if sold for 19.140 euros…
Now, before you start jumping around in joy thinking that the Volkswagen ID.3 will be at least 40 % cheaper to buy than the e-Golf wait a minute. With electric cars costs and prices are only remotely related. For example the same Volkswagen e-Golf that in Germany is priced for 31.900 euros, in Portugal costs 42.904 euros…
The truth is that automakers first decide how many electric cars they want to sell (globally or in a specific market) and then calculate for how much they can sell them to maximize their profits. With limited production/supply, prices are inevitably high, regardless whether costs are high or not.
Unfortunately, regarding electric cars legacy automakers still operate as cartels and cooperate to reduce market competition. Just like the OPEC (Organization of the Petroleum Exporting Countries) cartel operates. The price is calculated after they decide how many oil barrels they want to produce and export, it has nothing to do with costs.
On the bright side, more demanding emissions regulations starting already next year in the EU (European Union) force a production increase of electric cars, this alone will inevitably make them more affordable.