Volkswagen would like to introduce a new, more affordable all-electric model in the United States in the not-too-distant future.
According to Reuters, Reinhard Fischer, senior vice president and head of strategy at Volkswagen Group of America, said at the Reuters Events Automotive USA 2023 conference in Detroit that the company plans to build an electric car under $35,000. The new, more affordable model might enter the market in 3-4 years.
The United States and Mexico are under consideration as possible production sites for the cheaper EV. Additionally, Volkswagen is also looking at localizing the assembly of battery packs to qualify for battery-related incentives under the Inflation Reduction Act of 2022 (IRA).
Because of the ongoing inflation, a car under $35,000 might actually be the equivalent of a $30,000 car today. This price could be reduced even more if the $7,500 federal tax credit is still around when the vehicle launches.
Only time will tell whether the new model will materialize and whether it will be based on the upcoming MEB Entry platform for small cars – smaller than the ID.3 hatchback. Reinhard Fischer said, "We are not scaling back" in regard to VW's plans for the U.S. market).
For the sake of comparison, let's note that the currently available, entry-level Volkswagen ID.4 starts in the U.S. at an MSRP of $38,995, but with the obligatory destination charge, it's over $40,000 before any incentives.
| Model | Base Price | Dest. Charge | Tax Credit | Effective Price |
| 2023 Volkswagen ID.4 Standard 19-inch | $38,995 | +$1,295 | $7,500 | $32,790 |
| 2023 Volkswagen ID.4 S 20-inch | $43,995 | +$1,295 | $7,500 | $37,790 |
| 2023 Volkswagen ID.4 Pro 19-inch | $43,995 | +$1,295 | $7,500 | $37,790 |
| 2023 Volkswagen ID.4 Pro S 20-inch | $48,995 | +$1,295 | $7,500 | $42,790 |
| 2023 Volkswagen ID.4 AWD Pro 19-inch | $47,795 | +$1,295 | $7,500 | $41,590 |
| 2023 Volkswagen ID.4 AWD Pro S 20-inch | $52,795 | +$1,295 | $7,500 | $46,590 |
This base version is equipped with a 62-kilowatt-hour battery for an EPA Combined range of 209 miles.
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