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Volkswagen seeks to leave Dieselgate behind with all-electric compact SUV, the ID.4

By Russ Mitchell, Los Angeles Times on

Published in Business News

Volkswagen unveiled its new battery-electric ID.4 compact SUV on Wednesday, the linchpin in its effort to move past the Dieselgate emissions cheating scandal and into a zero-emissions future.

Significantly, the car will not be marketed as any kind of Tesla-killer.

"We don't go all out to compete head to head with the other EVs out there," said Jeffrey Lear, electric vehicle product manager at the German company's U.S. marketing arm. "We're out to win the hearts of compact SUV buyers."

In other words, to woo buyers away from two highly desirable suitors: the Toyota RAV4 and the Honda CR-V.

The idea is to mainstream the ID.4 as a "no comprises" alternative to gasoline-powered competitors.

"By targeting compact crossover buyers, they're making a calculated decision to pull from a broader, more open-minded consumer base that's less likely to be swept up in the Elon Musk frenzy," said Jessica Caldwell, Los Angeles-based market analyst at Edmunds.

 

A large and growing pool it is: In 2019, 2.89 million compact sport utility vehicles were sold in the U.S., 700,000 more than in 2014, according to Kelley Blue Book.

But at $39,995 before incentives, the ID.4's premium pricing presents a challenge, according to Caldwell: "Consumers say they're open to buying an EV, but few pull the trigger" and most revert to gasoline power.

In the U.S., the trend is not good. Battery-electric and plug-in hybrid vehicle sales declined 7% last year, to 325,000, and accounted for only 2% of the U.S. market out of 17 million sold. Most of those electric cars were Teslas. Which means it's high-pressure time for Volkswagen's sales and marketing department and its 650 U.S. dealers.

Dealers, especially outside California, have been accused of shrugging off the electric car market in favor of more-profitable vehicles. Volkswagen is making a big effort to counteract that. It plans to reimburse dealers up to half the costs needed to prepare their properties for electric car sales and to reimburse them to up to 75% of marketing costs.

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