Volkswagen AG is adding to its range of budget-friendly electric cars with a sub-compact SUV, as incentives and high fuel prices push European buyers to switch from gas-powered best-sellers like the T-Cross.
Priced from around $32,000, the ID. Cross will pad out VW’s lineup of affordable electric city models that are increasingly competing with the likes of BYD Co.’s Dolphin Surf.
The car is available for order, though sales of the version with a smaller battery will start at a later date, VW said Wednesday. The ID. Cross is joining VW’s new Polo, Cupra Raval and Skoda Epiq that offer electric driving at a lower price tag. All of the models will be made in Spain, where production costs are far lower than in VW’s German home base.
Battery-car and plug-in hybrid sales in Europe have surged this year, driven by subsidies in Germany, the region’s biggest market, and France. High fuel prices due to the war in the Middle East have made EVs even more attractive. Through the first five months of the year, combined sales of cars with a plug have gained 29% to make up more than one-third of total registrations.
Bolstering the offering of “people’s cars” comes as VW Chief Executive Oliver Blume last week said the company was surprised by the speed of the market share grab by Chinese companies. Carmakers like BYD and Chery Automobile Co. took 10% of the total market in Europe for the first time in May, with Chery’s Jaecoo 7 SUV ranking as the UK’s third-most-popular model during the first half.
For VW, keeping hold of Europe, where it is the biggest carmaker, is becoming even more pivotal as the group’s sales crater in China, and efforts to boost demand in the U.S. are struggling.
For the ID. Cross, drivers will be able to recharge to almost full in 23 minutes, for a maximum range of 267 miles. Despite its budget-conscious tag, the car features optional massage seats and a dimmable panoramic sun roof.
Last week, the maker of Audi and Porsche cars discussed more restructuring plans that could target doubling global job cuts to 100,000 and potentially shutting carmaking sites in Germany. The proposals would rank among the most drastic measures in VW’s post-war history.
Like German peers Mercedes-Benz Group AG and BMW AG, VW’s market share in China has slumped as buyers in the trio’s most important market turn to domestic brands.
Draeger-Mazer writes for Bloomberg.
