The first electric car from Volkswagen built on the new MEB platform is almost here. The Volkswagen ID.3 could be to Europe what the Tesla Model 3 is to North America, a groundbreaking electric car.
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.
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.
While the Volkswagen ID.3 adopts the new MEB platform, exclusively made for electric cars, the Volkswagen e-Golf uses the hybrid MQB platform made to allow multiple powertrains.
Nonetheless, most of the savings come by replacing NCM 111 battery cells from Samsung SDI with new more energy-dense NCM 712 cells from LG Chem. The reduction of the cobalt content in NCM 712 batteries allows to achieve around 90 euros per kWh at the battery pack level, which is crucial when the goal is to reach high production levels.
In the future, Volkswagen can further reduce costs by adopting CTP (module-less) batteries that are cobalt-free.
This means that the Volkswagen ID.3 will be highly profitable, but don’t expect it to be at least 40 % cheaper to buy than the e-Golf. With electric cars, production costs and prices are hardly related.
Currently, the reality is that legacy automakers first estimate how many electric cars they need to sell to comply with emissions regulations to only then estimate for how much they can sell them and still find the required customers.
A clear example of this situation is the COVID-19 lockdown, which resulted in a drop of ICE (Internal Combustion Engine) cars sales. This means that automakers no longer need to sell as much electric cars as it was previously estimated to comply with emissions regulations this year.
For this reason in Germany:
- Until next year SEAT no longer accepts orders for the Mii Electric.
- A Volkswagen e-up ordered today will only be delivered next year.
- Previously SKODA stated that the Citigo-e iV would cost way below 20.000 euros before government subsidies, but now the basic version was discontinued and the Citigo-e iV has a starting price of 24.360 euros…
Moreover, if there are government subsidies involved, they’ll incentive automakers to artificially inflate the prices. If automakers dropped the prices of their electric cars they would prove that the technology is already mature. This would result on a ban of polluting cars and automakers would also stop receiving subsidies to produce electric cars…
The good news is that not only Chinese automakers are about to arrive, but also Tesla will start the production of its electric cars in Germany next year. Therefore, there are good chances that next year not only Volkswagen but also other legacy automakers will sell more electric cars than what is strictly required to comply with EU emissions regulations.
Anyway, let’s see the press release.
Four weeks after the start of ordering for the limited ID.3 1ST for pre-bookers, Volkswagen is opening the ordering system to the public on July 20, 2020. Customers in many European countries will be able to choose from seven pre-configured ID.3 models at dealerships and to order the appropriate charging equipment at the same time. Buyers will benefit from attractive concessions for charging via WeCharge for up to 3 years. All seven ID.3 models will be eligible for the maximum state subsidy of €9,480 granted as an environmental bonus in Germany. Subsidies will also be available for the ID.3 in many other European countries.
While the prices for this year aren’t amazing, I have high hopes for the Volkswagen ID.3, as it seems to be a great electric car for the European market.
Next year we’ll be able to see its true potential with some possible price reductions across all models and the introduction of the entry-level model.