Volkswagen Takes On Tesla’s Model Y With A New Electric SUV

Volkswagen has the capacity to make 300,000 electric vehicles next year.

A VW ID.4 (L) and VW ID.3 are standing in front of the Frauenkirche on the occasion of a Volkswagen vehicle presentation on the Neumarkt. Sebastian Kahnert/picture alliance via Getty Images

Despite the global manufacturing woes brought upon by the coronavirus pandemic, German auto giant Volkswagen will unveil its first electric SUV on time, accelerating its cutthroat race against Tesla across all popular electric vehicle categories.

Volkswagen announced Thursday that production of its ID.4 electric SUV has started at its plant in Zwickau, Germany, marking another milestone in the automaker’s foray into the world’s fastest-growing passenger car sector.

The ID.4 is built on Volkswagen’s new modular electric car production platform, or MEB, the same platform supporting the mass production of ID.3., a smaller compact car debuted at Frankfurt Motor Show last year.

The ID.4 is the latest mass-market electric SUV to compete with Tesla’s new Model Y. Hyundai has a comparable model called Kona. Los Angeles-based startup Fisker is mulling a similar affordable SUV called Fisker Ocean, but it’s unlikely to hit the assembly line until 2022. 

Volkwagen’s luxury brand, Audi, has been making a higher-end SUV called e-tron in Europe since 2018 to compete with Tesla’s Model X. And its ID.3 compact car is widely seen as an answer to Tesla Model 3. 

Volkwagen said the ID.4 is set to make its global debut sometime in September, with the first batch of vehicles being built and sold in Europe and China. Production in the U.S. is expected to begin in 2022 in Chattanooga, Tenn.

The ID.4 will have a range of up to 500 kilometers (311 miles), about the same as Model Y. The car will first come in a two-wheel-drive version first, followed by an all-wheel-drive version.

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Volkswagen didn’t reveal the price point. Based on its past pricing strategies, the ID.4 will likely fall in a similar price range to Model Y as well, which starts at $40,690. The ID.3 is priced at just under $33,000, about 10 percent lower than Tesla Model 3. And Audi e-tron starts at $77,400, also comparable to Model X.

Between ID.3 and ID.4, Volkswagen said the MEB assembly line has the capacity to manufacture 300,000 vehicles next year. (For comparison, Tesla aims to deliver 500,000 cars across all of its models in 2020.) The German carmaker has pledged to investing $40 billion over the next five years to reach an annual output level of 1.5 million units.

“We are right on schedule with the Volkswagen brand’s transformation process to e-mobility. The ID.3 is now being followed by the ID.4,” Thomas Ulbrich, Volkswagen’s head of e-mobility, said in a statement on Thursday. “Given the major societal challenges of recent months, the successful start of ID.4 series production is an exceptional achievement.”

Volkswagen Takes On Tesla’s Model Y With A New Electric SUV