Volkswagen will “probably” not launch its next battery-electric vehicle, the ID.7 sedan, until sometime next year in the U.S., and some suspect it could be pushed back even further as it struggles to reverse plummeting sales of its original ID.4 SUV.
Former VW Exec Thomas Schaefer unveiled the ID.7 at the 2023 Consumer Electronics Show.
Volkswagen has committed more money to its electrification program than any other manufacturer, an estimated $100 billion, according to company figures. But the payoff is coming slower than expected and the automaker is now rethinking the pace of its EV rollout.
In one critical move, the U.S. launch of the ID.7 sedan is “probably” not going to happen until next year, at the earliest, according to the automaker’s U.S. CEO. And even that date is up in the air.
The delay reflects uncertainty about consumer demand as the pace of growth in the EV market slows. More specifically, VW is growing increasingly concerned about declining demand for its original battery-electric vehicle, the ID.4.
Another delay
Volkswagen first revealed the ID.7 at the Consumer Electronics Show in Las Vegas in January 2023. The sedan is approximately the size of the now-discontinued VW Passat. In European trim it had a target of as much as 700 kilometers range, or about 440 miles – though that was also expected to drop close to 300 to 350 miles in the U.S. using the tougher EPA testing cycle.
Part of the problem is that ID.7 is a sedan in an SUV-centric market.
VW began taking orders for ID.7 in August 2023 for European delivery, with the first products delivered around the end of the year. The American launch was supposed to be early 2024. But the automaker has so far delayed the introduction and given no hard news on when it now will take place
“We’re ready to launch the ID.7 as long as there’s consumer demand,” VW Group of America CEO Pablo Di Si told Automotive News. But he added that “We’ll see. We’ll probably launch it next year. We haven’t decided yet.”
Plunging demand
There are several reasons why Volkswagen officials seem so cautious.
To start with, there’s the ID.7’s body style. Sedans and other passenger car designs are clearly out of favor in the U.S. market. Volkswagen ended U.S. sales of the Passat in 2022 due to declining demand. It has also dumped the mainstream version of the Golf and the coupe-like CC.
Making matters worse, demand for VW’s original ID.4 has plunged this year.
A hefty price tag is also a potential challenge, with analysts and retailers expecting VW to price the American version of the ID.7 somewhere north of $50,000 to start.
Add the fact that the automaker’s first all-electric model, the ID.4, is losing momentum rapidly. During the second quarter, sales of the all-electric crossover fell 15% year-over-year. During the July-September period, however, demand plunged 58%, from 10,717 during the second quarter to just 4,518.
That downturn came even as U.S. EV sales overall gained about 10%. Ford was up 12% during the third quarter, with Chevrolet up 26%, Nissan gaining 41% and Cadillac surging a hefty 139%.
More VW EV News
Flexibility is key
The next big VW EV launch comes with the ID.Buzz microbus.
VW is by no means getting ready to abandon the EV market – but, like key competitors, it is trying to chart a course that reflects changing demand.
During a dealer meeting in Orlando last month, Di Si told Volkswagen retailers, “Having flexibility means that we can anticipate the ID7 or not, we’re going to bring it to market or not.”
At the time, he appeared to see a place for the electric sedan – at least at some point. “I think we will (launch it in the U.S.) because I think the demand will be there next year.”
Getting Buzzed
What could be the real test just began this month with the formal sales launch of the ID.Buzz, the long-awaited, all-electric successor to Volkswagen’s legendary Microbus.
Three versions of Buzz will be offered in the U.S., the well-equipped, rear-wheel-drive Pro S starting at $59,995 – before adding $1,550 for delivery fees — with the topline 1st Edition coming in $10,000 higher.
VW officials are positioning the Buzz as a halo product for its EV line-up, however, and don’t expect it to generate substantial sales volumes.
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