We won’t join EV price war in Australia, says Volkswagen

Volkswagen Australia says it has no interest in a race to the bottom on EV pricing following news of the latest Tesla price cuts.

The most popular EV in the country has just seen a further reduction to its entry price point - now $55,900 plus on-roads for the Model Y RWD - and it seems logical that a brand like VW, which is soon to launch its first EV in this market, would be keeping an eye on such developments.

It’s just a few months before the roll-out of pre-orders for the ID.4, and it’s the burning question for anyone who has paid attention to the delay-upon-delayed launch of VW’s first EV in Australia.

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Volkwagen ID.4 1st

Ralph Beckmann, general manager of marketing and product for VW Australia’s passenger vehicles, said the company will not engage in a battle of discounts when the first fully-electric ID model launches.

“We’re not going to get into a price war,” said Mr Beckmann. “The brand never has, it never has competed on price, it’s a competition on value.

“What we’re bringing with ID – and you will see when we announce the pre-sale in a bit more detail, is [we’re launching] with a far more comprehensive package than just the product,” Mr Beckmann said, referring to the brand’s announcement that it will offer discounted fast-charging at Ampol Ampcharge facilities, as well as tailored home-charging solutions for single- and three-phase households.

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“There’ll be some other kinds of solutions that we will be offering, so it’s a value proposition rather than entering a price war,” Mr Beckman said.

For context, the Model Y and ID.4 align pretty closely in terms of the part of the market they are targeting.

The Model Y is slightly larger in all directions at 4750mm long, 1921mm wide and 1624mm tall, whereas the ID.4 is 4600mm long, 1852mm wide and 1613mm long. The Tesla also has more cargo capacity with a claimed 854L available (ID.4: 549L). And the Tesla is available with a choice of rear-wheel drive or all-wheel drive, and the ID.4 is expected to be offered with the same.

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Daniel DeGasperi, VW Australia product and PR communications manager, said that the rush to cut prices in light of highly competitive forces can bode badly for an important stakeholder of a car business – its consumers.

“When manufacturers discount, you often hurt your most loyal buyers, and you really slash resale values significantly,” he said.

“So you’ve got to - as far as possible - future proof your business by putting in really good price points,” Mr DeGasperi said. “And that’s why we’re not here today telling you ID.4 pricing, because there is always opportunity to do better with the pricing, and that’s what we want to do before we announce it.”

Mr DeGasperi said “July is when people can buy it”, and it is expected that the brand will continue to hold its cards close to its chest until then.