VW Stays Committed to BEVs

DETROIT – Yes, automakers overproduced battery-electric vehicles in anticipation of greater consumer demand, acknowledges Volkswagen strategist Reinhard Fischer. And, yes, U.S. dealer inventories of unsold BEVs are piling up.

“But the interest is there,” he says, predicting a bright future for electrified vehicles in America, despite bumps along the way.

BEV sales are growing, but at a slower rate than many automakers anticipated. That gives some industry executives pause about the big investment in the historic transition from internal-combustion to electrified propulsion systems.  

Yet VW remains all-in for the anticipated big pivot.

“We’re not scaling back in the U.S., although I’ve read some people are,” Fischer, VW Group of America’s senior vice president and head of strategy, says at a recent Reuters automotive conference here.

Although BEV sales growth hasn’t met high expectations, U.S. deliveries of 915,500 units set a record last year. This year, sales are expected to close in on 1.2 million, Fischer says.

BEV-purchase reluctance among consumers centers on affordability and range anxiety linked to the lack of a full-fledged fast-charging network.

But such transitional obstacles can be overcome, Fischer says. “There are not many EVs today below $35,000. That’s where the problem is, as we’re all learning.”

That will change, he predicts, with manufacturing economies of scale. Today though, “EVs are not built on the scale of ICE vehicles, so, yes, they’re relatively expensive.”

VW plans to introduce a BEV under $35,000 in North America in three to four years.

Impending less-pricey models won’t be bare econoboxes. But they’ll contain fewer accoutrements than earlier models that “had every gadget you can think of,” Fischer says. “Do you really need all of them?”

In the U.S., VW currently sells the battery-electric ID.4 with a base price of $38,995. The compact CUV is produced at its Chattanooga, TN, plant.

The German automaker next year plans to start selling two other BEV models in America: the ID.Buzz microbus (currently on sale in Europe) and the ID.7 premium sedan.

VW eventually may offer an electrified large SUV, according to Fischer, though he backs off from “making an (official) announcement.”

Plumbing the depths of consumer demand is critical to avoiding oversupply issues in the evolving new world of mobility.

But it’s also important to suit up for the big game, says the VW Group strategist. “Everyone is getting ready for it. It’s just a matter of timing the demand.”