Volkswagen Rethinks US Sales Strategy After Biden EV Push
According to a report by The Detroit Bureau, Thomas Ulbrich, Volkswagen’s product development officer, told the press last week that his company will “realign … in a massive way” its EV sales strategy in the US as a result of President Biden’s policy initiatives designed to boost EV adoption. Ulbrich’s remarks were first reported by Bloomberg News.
Biden has proposed spending $174 billion to promote the sale of electric cars in the US. Much of that money will be used to expand America’s EV charging infrastructure, but there are also incentives for companies who manufacture electric cars in America using American workers and American-made parts, particularly batteries.
Volkswagen is constructing a new EV factory adjacent to the facility where it builds conventional cars in Chattanooga, Tennessee. The new plant is scheduled to manufacture the ID.4 electric SUV and one other electric model yet to be named. Ulbrich’s announcement contained no details, which leaves the door wide open for us to speculate.
Volkswagen has decided not to import the ID.3 hatchback to America, presumably because Americans won’t buy sedans and don’t really care for hatchbacks. They want SUVs, SUVs, and more SUVs. Ford, GM, and Chrysler have all but stopped manufacturing sedans because of falling demand. And yet, Tesla seems to be having no problem selling all the Model 3 sedans it can bolt together in its factory in Fremont, California. There is some sort of disconnect there and maybe Volkswagen could decide to bring the ID.3 to American shores after all.
Volkswagen will also offer the ID.6, an SUV with third row seating, in China shortly. Could that be an option for America, where demand for 3rd row seating is growing? There is also the ID.5, which is an ID.4 with a more coupe-like roofline for those who say they want an SUV but don’t really like the look of one. And what about the ID. Buzz — the battery electric reincarnation of the iconic VW Microbus? Demand for that vehicle could be insanely strong in the US. The Detroit Bureau says that vehicle will be built in Mexico.
At that news conference in Munich last week, company officials talked about new EV products that are in development, including the AeroB, an electric station wagon, and something code named Trinity, which is supposed to be a “Tesla fighter” — whatever that means.
Will any of those models make it to America? We simply don’t know. All we do know is that policy initiatives drive changes in manufacturing policy. Biden’s plan is massive and it will have equally massive impacts on the kinds of vehicles sold in America and the companies that build them. That, in turn, will have significant effects on domestic employment.
The prior administration promised to save American jobs in industries facing extinction. The Biden proposal will create jobs in industries with unlimited growth potential. If Volkswagen’s course change is any indication, the Biden plan is already having the desired effect.
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