VW May Lose Over $3,000 On Every I.D Hatchback It Sells

Volkswagen will reportedly lose approximately 3000 euros ($3347) on every I.D hatchback base model it sells, Germany’s Auto Motor & Sport reports.

It is claimed that the entry-level I.D hatchback will be outfitted with a 48 kWh battery pack that offers roughly 200 miles (321 km) of range on the WLTP cycle. Volkswagen has yet to say how much this model will cost but it will reportedly start at around 29,990 euros ($33,461) in Europe before incentives.

At that price point, Volkswagen apparently won’t make any money on its first mass-market electric vehicle and it may be unable to turn a profit on this model until 2025, Automobile Propre states.

Also Read: 2020 VW ID Hatchback Spotted Testing Its Electric Powertrain In Extreme Winter Conditions

It remains to be seen if the German car manufacturer will lose similar amounts of money on other versions of the I.D. hatchback and the plethora of other models in its forthcoming I.D. family. However, it seems apparent that it will be quite some time before VW will be able cash out on its electric vehicle like it is able to with its ICE-powered vehicles.

While the 48 kWh version of the I.D. hatchback will sit at the base of the range, it won’t be the first variant to hit the market. Instead, a mid-range Launch Edition model will allegedly be the first to hit the market, outfitted with a 62 kWh battery pack that should offer up a range of around 280 miles (450 km). This model is expected to cost a touch over 35,000 euros ($39,000) before incentives in Europe.

Sitting at the top of the I.D. hatchback range will be a model with an 80 kWh battery with a range approaching 373 miles (600 km).

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  • FlamerSmasherMBXCar_Part II

    Great another OPEC crybaby story.

    • Dude

      Yeah I’ve come to the conclusion that these “X company will lose Y thousands of dollars on each Z electric/hybrid car” stories are garbage. They never have any source or corroboration for the claim and the number is always ridiculous. In trying to find the tiniest shred of credibility or sense in these kinds of articles I found one that said GM was losing $50,000 on every Chevy Volt…. yeah, ok.

      These “analysts” are using really bad math to push some probably malicious narrative (Bob Lutz has a good piece on why they’re wrong) so I hope no one takes them seriously.

      • Stephen G

        Total excuse to jack up prices.

        • Dude

          I would assume that it would be to make electric cars look bad as most people know it is more expensive to make them, but it’s obviously not that crazy.

  • Stephen G

    BS to keep prices high.

    • Matt

      VW could easily make money on this car – they’d just have to price it higher. But they want to stick to a price point which is less than what it currently costs to build the car. It’s really not that hard to understand, nor does it have to become some big conspiracy about ‘keeping prices high’. Its start price of $33k could hardly be considered ‘high’ for a bespoke-platform pure EV with Golf levels of quality/assembly.

      • Stephen G

        LOL “bespoke-platform EV with Golf levels of quality”? The Golf is a crappy little car with vinyl seats!

        • Dude

          “The Golf is a crappy little car with vinyl seats!”

          When was the last time you looked at a Golf? 1976?

    • McFly

      The margins in the car industry are slim. That’s why everybody wants to make premium cars – so they can make the consumers pay more for perceived value.

      According to people in the business, a Porsche Boxter is just 30 % more expensive to produce than a Golf, but because of the perceived extra value the price can be set significantly higher.

      However, when you make an electrical car the margins are still eaten by production costs even in a premium car. But that will of course change.

      • Stephen G

        I happen to know an 1992 an average Chrysler minivan selling for $22K cost $10K to build. All the bills paid. I can only imagine that the more expensive the car the higher the profit margin. If you calling 55% profit margin slim then I envy you.

        • McFly

          But Chrysler filed for bankruptcy a few years later, didn’t they?

          The car industry has changed in the last 27 years. Killed brands, mergers, take overs, brands moved into premium. I can’t see how that can happen if everybody makes a lot of money on each car.

          • Stephen G

            Sure they did. How many big fat bonuses does it take to drain a bank account? Bankruptcy is about how much cash you piss away vs your earnings…nothing to do with profit margin.

    • MarketAndChurch

      They have 81 years of perfecting gasoline engines, and thanks to greedy Euro politicians who wanted to tax gasoline, vw and other European companies also have a lot of years under their belt perfecting diesel technology (and cheating helps too. And they – as in almost all European car companies – cheated).

      But now they’re putting out a vehicle powered in a totally different way, and have to engineer everything from the ground up. So a lot of the costs are up front. If you spread these initial costs over the span of 10 years, VW may actually come out saving a ton of money in the long run. It’s just that we’re seeing the price tag up front for a brand new type of vehicle and it might scare off some people.

      This isn’t to forget that VW is also racing to be one of the leaders of autonomous vehicles, and that the cost of that tech will probably be factored into the price of this car. VW wants this product line to represent the car of the future, or VW’s vision of what people 10 years ago imagined everyone driving in 2020.

      • Stephen G

        Really!? Why don’t you tell me the story about the revolution in tie-rod end technology, or door latch technology? Tell me the wonders of change that fenders have undergone or how a quarter panel of today is nothing like the quarter panel of 1970. A 2010 Golf is the same thing as a 2020 Golf save the useless back up camera and Apple conectivity. Also, if you shop outboard motors for your boat you will find that electric motors are within 10% cost of ICE.

        • Matt

          What the f*** does any of that have to do with the cost of developing a brand-new EV platform? Door latches are not the same as EV battery and motor technology. Batteries are extremely expensive – not only to buy but to produce. Why don’t you ask Tesla how it can have record sales and still be burning cash. It’s no walk in the park.

          • Stephen G

            Really!? So tell me how the door latches are different on an electric vehicle than they are on a ICE powered vehicle and why. I’m assuming electric cars still have doors right, VW didn’t have to develop a new way to get into an electric car that’s different from an ICE. A new platform is a new platform regardless of power source. Tesla batteries are $100/kWh. Tesla is burning cash because it’s subsidizing it’s other ventures.

          • Matt

            Door latches make up a tiny fraction of a vehicle’s build cost – completely irrelevant argument. The ID needs a new factory, new tooling, new supply chain and of course is made from more expensive components (battery and drive system). Compare that to the new Golf 8, which is on the MQB platform that is already used by dozens of models so economies of scale are huge. With the Golf, the factories are the same, the supply chain is the same and the forecasted sales volumes will be healthy and production not limited by engine supply. VW know they will be able to recoup the billions in development costs within a short timeframe. With the ID everything will be new, and they theoretically should price the car higher due to the additional costs of development and major component values. But they’re not – because they want to be the top volume seller in the EV market. That means making a loss initially, before economies of scale improve and the platform can be used for additional VAG models and the cost of batteries etc slowly comes down. It is a long-term strategy.

          • Stephen G

            What you’re not getting is that a new chassis is a new chassis. Development cost for a car with an electric drivetrain is the same as an ICE. VW has been building an electric Golf for years. Again, building cars for 81 years give VW a tremendous leg up over up starts such as Tesla. That’s why VW should be able to produce a much more cost effective product. So the only reason an economy electric Golf is so close in price to a luxury Model 3 is price gouging!

        • MarketAndChurch

          First of all, it is highly rumored that the next Golf(and all other VW’s) will have level 3 autonomous driving features.

          There’s a ton of things to consider here. Researching and developing a new platform, engineering the battery and electric engine, producing the vehicle to meet the 30,000 price point, and hoping that demand will pick up strongly enough so that you can pay off all of those up-front costs as quickly as possible and eventually, turn a profit.

          Engineering a full-electric vehicle requires expenses either to a heavily modified existing platform, which is very inefficient, or into researching and developing a brand new platform that is designed with a large battery in mind, not to mention an electric engine that can make the most of the limited power available… and do so while still giving customers an enjoyable or acceptable level of power/performance.

          Most all-electric vehicles of the former variety have failed(Focus Plug-in). Only ones going the latter route with an EV-focused architecture have had success(Tesla).

          If manufacturers could produce a Model 3 competitor, they would. But they can’t, so they don’t. Tesla isn’t profitable, and electric cars aren’t profitable, so until demand – artificially created such as emissions laws in Europe or real like the desire to be seen driving a cool Tesla – picks up, to sell an electric car at 30,000 is almost always done so at a loss.

          This technology is still mostly early-adopter tech. If more people bought electric cars, it would be mainstream by now, but they aren’t cheap enough or have the right performance for that to make financial sense (for most people). There are a ton of reasons why electric cars aren’t popular, including consumer preference and buying habits. But collusion isn’t one of them.

          • Stephen G

            As soon as you wrote “electric engine” you lost all credibility. Car companies routinely develop brand new platforms and many platforms are shared between car companies. If that was the price breaker than they would just use old chassis for a longer period of time.

  • Maisch

    I dont think the math are that bad here, people dont understand how cheap a current petrol or diesel engines are to produce, especially compared to battery costs. Margins are already small on cars, so there is very little rooms for a cost increase without increasing the end customer price alot. There is no one in the industry earning money on electrical cars, even though there are hundreds of startups, even tesla that only sells expensive cars is bleeding at an hilarious rate. Building cars at an high standard its not easy or cheap to do.

    • Stephen G

      Nobody would sink billions in capital into a failing business system. There are almost 500 electric start ups in China because the profits margins are tremendous. Don’t be fooled.

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