Volkswagen's Tesla competitor is finally here: Meet the ID.4, a cheaper alternative to the Model Y designed to sell against America's most popular cars
- Volkswagen unveiled its first fully electric mass-market car for the United States on Tuesday: the ID.4.
- The $39,995 compact SUV is priced to compete with the Toyota Rav4, Honda CR-V, and similar four-door hatchbacks.
- VW Group's CEO for North America, Scott Keogh, says the company took many nods from Tesla in designing the new car.
Volkswagen knows exactly what it's up against if it wants to actually sell electric cars to Americans, and it's not backing away from the challenge.
The automaker on Tuesday unveiled the ID.4, its four-door hatchback answer to Tesla's Model Y, with a slightly shorter range and cheaper price tag that could allow it to compete against some of the most popular crossovers in the US.
The first models of the new car will be made in Germany and hit the US in the first months of 2021, Scott Keogh, the automaker's North American CEO, told Business Insider. A few months after that, a factory overhaul in Tennessee will be complete, allowing it to domestically produce the ID.4 for US buyers and add eventually add a premium, longer-range version as well.
Here are the important details:
The ID.4 is only rear-wheel drive for now, meaning it's not yet a true competitor to the Model Y's dual-motor, all-wheel powertrain. It also has a smaller range, clocking in at 250 miles (which hasn't yet been tested by the EPA.)
"We obviously want to provide enough range," Keogh said. "We also want to hit a price point. I think that marriage always needs to be there."
Its 82 kilowatt-hour battery can produce 201 horsepower and 228 pound-feet of torque. Coupled with lie-flat seats and 64 cubic feet of cargo space, the car should do everything that people currently buying Toyota Rav4s, Honda CR-Vs, or Nissan Rogues wants and need, Volkswagen hopes.
"For the most part it's not people who say 'I need to carry 20 golf bags,'" Keogh said. "No, it's 'I need a car to carry my one golf bag,' or, 'I don't have 18 kids, I have two kids; I'm not towing eight yachts, I'm towing a couple of bikes.'"
Volkswagen isn't shy about what it's learned from Tesla, which virtually pioneered the market for fully electric vehicles in the US and hopes to sell 500,000 cars worldwide this year. Keogh says the company wants to take those ideas and bring them to a truly mass-market, affordable car.
The ID.4 will start at $39,995 — a full $10,000 cheaper than the Model Y — but still above what most drivers pay for similar gas-powered cars. Plenty of $7,500 federal tax credits remain that would bring the starting price down to the equivalent of VW's 2021 Tiguan SEL. An eventual dual-motor version will start around $45,000 for a powertrain more on-par with the Model Y.
Buyers will also get three years of free fast-charging on Electrify America's network, the largest in the country.
"If you want to get mass adoption of electric vehicles, this is the segment where you want to start," Keogh said. "We're not naive — I think we're going to see a lot of cars hitting here, but we're here now."
Taking a nod from Elon Musk
VW's also redesigned its website to facilitate online orders in conjunction with its dealer network, ripping a page straight from Tesla's playbook.
"I think we've learned a fair amount from what Tesla did and they've done some things really well," Keogh said, adding that Elon Musk " frankly disrupted and dominated the segment — no debate."
Inside, the ID.4 was designed to feel as luxurious as something with a much higher price in order to entice buyers that might otherwise opt for a luxury SUV.
The screen, on the other hand, isn't nearly as big as some competitors — a conscious choice VW made so that it doesn't "feel like you need an encyclopedia to learn about it," Keogh said. Android Auto and Apple Car Play come standard on the software system.
"This is our VW OS version 1.0 and will continue to get better and grow over time," Dustin Krause, VW's director of e-mobility, said.
By 2022, VW says the ID.4 will be produced locally at its Chattanooga, Tennessee plant with prices around $35,000. Those investments will let VW produce cars for markets around the world on the same basic battery framework.
It's all part of a broader corporate initiative to invest in the factory there while reducing its entire corporate carbon footprint to zero by 2050.
"This is profound for a global industrial conglomerate," Keogh said. "To sell an electric car you need that one-two punch. It needs to come from a great company, and bad companies don't sell great cars."
