Published on September 19th, 2019 | by Zachary Shahan0
Volkswagen ID.3 vs. Volkswagen Golf — 5 Year Cost of Ownership Comparison
September 19th, 2019 by Zachary Shahan
We don’t yet have an official price for the Volkswagen ID.3, but it is supposed to be “under €30,000” according to Volkswagen. We also don’t know if that is before or after subsidies, but it seems that it would be odd to announce a post-subsidy price since the car is for various markets and each country has its own incentive scheme. What I’m doing for this analysis is I’m running different scenarios, some with an assumed price of €30,000 (rounding up from €29,900 or whatever “under €30,000” means) and some with an assumed post-subsidy price in Germany of €26,000. Of course, electric vehicle subsidies are just there to balance out the market and correct for externalities of gas and diesel vehicles (human health and climate problems), so I think looking at the post-subsidy price is both logical from a consumer perspective and sensible from a market perspective.
For this analysis, I’m comparing the Volkswagen ID.3 to the lowest trim Volkswagen Golf and the highest trim Golf, but not adding any options/extras. The ID.3 likely has top-of-the-line technology, so even the base ID.3 should probably be compared to higher-trim versions of the Volkswagen Golf. Consider this an unfair handicap for the incumbents.
As with all such comparisons, this one is based on numerous assumptions. I tried to use logical, realistic assumptions, but these figures vary from individual to individual and some of them are quite hard to predict in general. Feel free to copy the Google Sheet and run a comparison or 5 with your own assumptions.
With all of those disclaimers and notes out of the way, here’s the comparison I came up with:
As you can see, based on the assumptions I felt most comfortable using, the Volkswagen ID.3 came out on top — that is, with a lower 5 year cost of ownership. In fact, even the high estimate for the ID.3 was lower than the cheapest Golf (the Trendline trim). But let’s run down some of the assumptions to make it clear how these results could change, for better or worse.
The purchase price was fairly straightforward. As noted at the top, though, we don’t really know what “under €30,000” is going to mean.
Resale value is a wildcard, as always. I gave the ID.3 a 5 year resale value of 43% of purchase price. I gave the Golf a resale value of 33% of purchase price. To be honest, I was more generous to the Golf than I think is realistic. Cities are increasingly banning non-electric cars from city centers or at least making them pay a congestion/pollution fee, which I think will drive down the value of non-electric cars more than electric ones. Furthermore, electric vehicles have much simpler powertrains with many fewer parts susceptible to failing. Electric vehicles also protect their brakes much better. All in all, I expect the ID.3 to have a much better 5 year resale value. But we’ll see.
Interest rate: 4%
Price of gas: €1.50 on average. Again, I think that gives a boost to the Golf, as I think gas prices will rise in the coming 5 years, but I tried to keep my expectations tempered since I have a tendency to be optimistic and I didn’t want to open up this analysis for easy criticism.
Price of electricity: €0.30/kWh. This is expensive compared to the US, but it is what it is. Install some solar panels and it should be much cheaper.
[Update] Maintenance: I used a 5 year estimate of €1,800 for the Golf based on information a German colleague found from German sources. I estimated €1,000 less in maintenance costs in those years for the ID.3 based a bit on Tesla Model 3 maintenance costs.
The other assumptions are expectations I found from the automakers or other expert entities.
What do you think? Is the Volkswagen ID.3 really going to come out with such competitive pricing? Are these assumptions realistic for many potential buyers? Is Volkswagen really going to let the ID.3 eat the Golf’s lunch?
It could take time for consumer awareness to catch up to the state of electric vehicles, but Volkswagen is heavily advertising its ID lineup, from California to Poland and back. Additionally, if the company is willing and eager to highlight the ID.3, that will rapidly increase consumer awareness, and it’s apparent immediately that Volkswagen is highlighting the ID.3.
While considering this comparison, also recall that there were 731,561 Volkswagen Golf registrations in 2018, making it the 7th best selling passenger vehicle in the world last year. If the ID.3 outcompetes the Golf on value for the money and even overall cost, why buy a Golf? Who’s going to buy a Golf? How long until the Golf is losing sales so much that it is discontinued? Furthermore, how many of those 731,561 sales can the ID.3 score in 2020? How many can it score in 2021?
I said earlier today to someone that I think the ID.3 could be the second truly mass market electric vehicle across the globe, trailing only the Tesla Model 3, of course. I’ve also pointed out that the two models are in different price ranges, so they are more complementary than competition, in my humble opinion. We’ll see if Volkswagen really does have the battery supply chain lined up to sell hundreds of thousands of this electric vehicle model per year. We’ll see if the company throws all of its manufacturing weight behind the ID.3 or continues to slow-walk the transition to a new electric kingdom. However, a the moment, the company looks very serious. If you go to Volkswagen’s German website, it heavily highlights the ID.3 and buries the Golf down at the bottom.
We’re seeing a changing of the guards, a new era of electric cars arriving. How ready are Volkswagen buyers and Volkswagen itself? We’ll see.
If you’d like to buy a Tesla and get 2,000 miles (3,000 km) of free Supercharging, feel free to use my referral code by October 1: https://ts.la/zachary63404. After October 1, it’s presumed that you will get 1,000 miles (1,500 km) of free Supercharging by using that referral code (or someone else’s).
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