Volkswagen Refuses To Take Part In Tesla's EV Price War

Industry News / 6 Comments

The German automaker is focusing on profitable growth.

Speaking with the German newspaper Frankfurter Allgemeine Sonntagszeitung, Volkswagen Group CEO Oliver Blume said his company would not join the electric vehicle pricing wars that have been started by Tesla and Ford.

To add some context here, Tesla recently announced significant price drops across its lineup, some amounting to over $13,000. In response, Ford dropped pricing for its electric SUV, the Mustang Mach-E.

"We have a clear pricing strategy and are focusing on reliability. We trust in the strength of our products and brands," said Blume when asked about the potential for lowering prices. Volkswagen wants to be a global EV leader but believes profitable growth is the right path, not engaging in a price war.

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Even without a price cut, the 2023 Volkswagen ID.4 is one of the most affordable EVs on sale right now.

The ID.4 Standard starts at $38,995, making it $7,000 less than the Mach-E Select RWD Standard Range and a whopping $14,495 cheaper than the Tesla Model Y Long Range. Now that the US-spec ID.4 is produced in Tennessee rather than Germany, it qualifies for the $7,500 federal tax credit.

We don't currently know how much the upcoming ID.7 sedan and ID.Buzz will cost in the US, but VW will likely remain competitive on price.

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As for Porsche, VW Group's famous sports car brand, it also sees little reason to copy Tesla. In fact, Porsche will go the opposite direction with a slight price increase on its Taycan EV and other models. "Price adjustments at the change of model year are standard industry practice," a Porsche spokesperson said. "The prices valid for the coming model year are expected to be published in March."

While Taycan sales will never hold a candle to Tesla, Porsche has never been about pure volume. Tesla's price cuts have tanked residual values, an issue that is non-existent for Porsche.

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