Volkswagen is the latest automaker to back off on its EV roll-out. The automaker told Headlight.News that “due to the ongoing challenging EV market” it has scrapped plans to introduce the ID.7 sedan to the U.S. market – though it will continue to be offered in Europe, China and a number of other markets.
Former VW Exec Thomas Schaefer unveiled the ID.7 at the 2023 Consumer Electronics Show.
Volkswagen has pulled the plug on the ID.7, the all-electric sedan it has promised to bring to the U.S. market for more than a year.
First shown at the 2023 Consumer Electronics Show, VW has repeatedly delayed the launch citing the slowdown in growth of American EV sales.
The ID.7 will continue to be offered in Europe, China and some other markets. But, for now, VW’s all-electric line-up will be limited to its original ID.4 crossover and the newer ID.Buzz microbus.
What changed?
VW is just the latest on a growing list of manufacturers who have either cancelled or delayed some EV programs. Ford last year scrapped plans for a three-row model in order to focus on more affordable battery-electric vehicles. Stellantis has delayed the launch of the Ram 1500 REV and cancelled a long-range version of the pickup. Land Rover has pushed back an electric Defender by at least one product cycle.
Volkswagen’s move comes as a result of cooling sales in the EV segment
“Due to the ongoing challenging EV climate, Volkswagen has decided to no longer offer the ID.7 to the North American market,” VW spokesman Mark Gillies told Headlight.News by text.
“Despite this, electric vehicles continue to be a core part of Volkswagen’s long-term product strategy, and new electric models will continue to be introduced for this market,” he added, noting that the automaker is “encouraged by the enthusiastic reception of the ID.Buzz” following its delayed U.S. launch late last year.
Why are automakers pulling back?
The enthusiasm that drove the industry to plan investments of well over $100 billion this decade has faded over the last 18 months, notably in the U.S. American EV sales surged 800% between 2019 and 2023, but the annually growth rate fell to about 9% last year.
VW still sees EV growth opportunities in the U.S., reporting strong demand for the new ID.Buzz and older ID.4.
Most analysts expect U.S. demand to continue increasing in 2025 and beyond – but by how much is far from certain. Several headwinds are at work, starting with the Trump administration’s plan to eliminate Biden-era sales mandates, strip California’s ability to set its own guidelines, and even claw back funding distributed to the States to expand the availability of public EV charging.
That said, demand continues to grow at a double-digit clip in other major markets. In China, “New Energy Vehicles,” a catch-all for EVs and plug-in hybrids, now are outselling both gas-only and conventional hybrid models. Europe continues to see strong growth, as well.
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ID.7 will live on
The VW ID.7 will continue to be sold in Europe and China.
VW originally previewed the ID.7 in 2023 and was expecting to bring it into the U.S. late that year. The initial American version was expected to deliver 282 horsepower through a single, rear-mounted electric motor, though more powerful twin-motor packages were expected to follow – much as has happened with the ID.4. The sedan was expected to deliver better range, though, about 300 miles from a 77.0-kWh lithium-ion battery pack.
The program was repeatedly pushed back, however. In April last year, former U.S. boss Pablo di Si announced an indefinite delay, the company noting it was examining the sedan’s potential “as market dynamics continue to change.”
Several company sources who spoke to Headlight.News on background said the slowdown in U.S. sales growth wasn’t the only factor that Volkswagen considered while deciding whether to move forward or scrap the project. They pointed to the weak American demand for sedans, whatever powertrain they relied on. It’s likely VW will only bring crossovers or other light truck body styles to the States when it eventually does add new EVs.
Even so, VW said it will continue offering the ID.7 in both Europe and China, as well as some other global markets, where sedans and coupes retain some level of popularity.
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