But thanks to the new Inflation Reduction Act, the news isn't all bad.
Volkswagen will increase the price of the ID.4 by $1,500 early in January, but it's not all bad news. In a letter sent to reservation holders, which electrek managed to get hold of, the German company also revealed that it made some changes to its battery suppliers, allowing it to end the current reservation system.
VW's announcement also states that the new pricing will only go live after 4 January 2023. Cars assembled before this date will retain the older MSRP. The price change will be applied to reservation holders, even though they may have placed an order months ago.
A reservation does not secure a price, which appears to be an America-only problem. In European countries, price protection is guaranteed for at least three months, and even then, dealers aren't allowed to charge hefty markups.
There is good news despite the price increase, however. Until recently, the ID.4 was built exclusively in VW's Zwickau plant in Germany, but it's now also being built at the Chattanooga factory in Tennessee. This is important for two reasons.
First, VW expects the additional influx of models to get rid of the reservation system. The dealers will soon have ID.4s on the floor, finally removing the main reason behind the insane markups we've been experiencing in the USA.
The second big news is the Americanization of the ID.4. Under the new Inflation Reduction Act, the 2022 ID.4 did not qualify for the $7,500 tax credit. Now that the ID.4 is more American than the Mustang Mach-E, the 2023 model most certainly qualifies, effectively canceling out the smaller MSRP increase.
If you are a potential ID.4 customer, take note of which battery will be fitted to your car. Previously, Volkswagen relied solely on LG Energy Solution as a battery supplier. SK On has now also signed on to be a battery supplier. AWD models will have SK On batteries, but RWD models will use both options.
The reason you might be interested is the charging times. The LG unit takes 36 minutes to charge from 10% to 80%, while the SK On unit can do it in 30 minutes. With charging times being a big selling point, you should check up. VW makes this easy by including the Monroney label on each reservation holder's online account.
SK On also manufactures its batteries in Georgia, which means models equipped with its battery will qualify for the full $7,500 credit and not just half.
These new regulations will only be enacted in March, as the US Treasury failed to produce a guidance document in time. This means the $7,500 credit will apply to all EVs for at least for the first two months of the new year.