There are a number of problems with trying to convert an existing vehicle to battery electric power. It’s sort of like making a boat that flies. You can do it, but why? By now, it is pretty obvious that an electric car starts with a battery pack mounted as low as possible in the chassis. Conventional cars have a lot of hardware underneath the floor — transmissions, catalytic converters, mufflers, driveshafts — stuff like that. Volkswagen went the “Let’s convert a conventional car to battery power” route with the E-Golf. But now it has the all new ID.3, which is pretty much the same size and shape as the venerable Golf but was designed from the ground up to be electric.
We all know batteries are the most expensive part of an electric car. That cost makes electrics cost more than conventional cars, so how are automakers supposed to make a profit building electrics? Ultimately, there has to be a business case for EVs or they won’t get made in significant quantities.
One way to profitability is to lower costs. According to Reuters, Volkswagen CEO Herbert Diess told investors this week that the ID.3 costs 40% less to build than the E-Golf. That is an enormous reduction and one of the reasons why Volkswagen says the ID.3 will retail for about the same money as a well equipped Golf Diesel. It is the secret sauce that will allow the company to meet its goal of selling millions of electric cars.
The battery in the new ID.3 can be used to add structural rigidity to the body, and the modular layout of the battery allows for advantages in packaging and economies of scale, Diess explained. The falling cost of batteries is also a big factor. “If you focus on an electric platform, all in all it accounts for a 40% reduction against the predecessor electric Golf. Most of it from cells and the battery system. Around 5-10% comes from dedicating an entire plant to electric vehicles.”
The ID.3 will start at around €30,000 in Europe. The first edition version with more range and a more powerful motor will go for about €40,000. But Volkswagen has plans for electric cars that will sell for as little as €20,000 — a segment on the market that has very few electric cars available at present. Volkswagen intends to be profitable by leveraging economies of scale so it can bring electric cars to the masses, not just the elites.