In the first quarter of 2023, Volkswagen accounted for less than 2% of the US auto market. It doesn’t have a big presence in the US. But it could. Toyota (+11% of the market) and Honda (+7% of the market) grew to become huge players in the market. Hyundai and Kia (+5% of the market each) more recently grew to become huge players in the market. Why wouldn’t Volkswagen be able to do the same? Of course, you need an angle and a solid pathway to such massive growth. You can’t just stick with the same strategy that’s had you lingering around the same level or even losing sales.
A significant change in a market provides an opportunity for companies with no or low market share to grow in prominence. But they have to see the change happening, jump to the front, and be brave.
Clearly, the auto industry around the world is electrifying. The US is a bit behind Europe and China, but it’s following the same trend. Volkswagen is aiming to be a global leader in electrification, and by many metrics, it is (even if it’s not first or second on the podium). However, in the US, it’s doing little more than its competitors. It has brought one electric crossover to market. Who else has done that? Oh, everyone.
I went to an Electrify America charging station with my aunt and uncle recently for their first EV fast charge. At the station, there were electric crossovers from Jaguar, Ford, Hyundai, and Mercedes. I’m sure if we wait a bit longer, we could have seen electric crossovers from other brands pop up. A few feet down the parking lot there were a bunch of Tesla Superchargers, where the queen of the electric crossover market could charge — that would be the top selling Tesla Model Y of course. Bringing an electric crossover to market is not brave or bold or innovative. It’s what every automaker and their mother is doing.
The one thing I can say about Volkswagen is that it seems intent on producing and selling a few more of these than most automakers, so it’s got a semi-leadership position in the market (it still heavily trails Tesla and quite heavily trails GM/Chevrolet as well). However, there’s a huge opening in the market — an opening that’s about to get even bigger — that Volkswagen has decided to ignore.
It’s true, smaller cars are not as popular in the United States as larger cars like crossovers. However, that doesn’t mean no one buys them. And as the options and competition are more limited, there’s more of an opening to sell some freakin’ cars. What non-Tesla EV sees more sales in the US? The smaller, cheaper Chevy Bolt. The Bolt is on track for about 80,000 sales this year, while the ID.4 is on track for about 40,000. Volkswagen already has a smaller, cheaper version of the ID.4 that it could sell in the US — the ID.3. It also has the even smaller and even cheaper ID.2all coming to market, yet Volkswagen says it won’t sell this vehicle here either.
Hello! Great questions. There's no plan to release an ID.2 model in the US at this time, but all future concepts/updates are posted on our https://t.co/TUZ713DXRo site. You're correct that the cell technology in the lithium ion battery used for the ID.4 is prismatic. (1/2) -KO
— Volkswagen (@VW) March 20, 2023
Hi Scott, we don't have plans to release the ID.3 in the US, but all concept vehicles will appear on our https://t.co/TUZ713EvGW site, under "models > concept vehicles." You can learn more about our ID.4 and upcoming ID. Buzz there as well. 🙂 -KO
— Volkswagen (@VW) March 23, 2023
Aside from the fact that Volkswagen could actually sell ID.2all and ID.3 vehicles in the US if it tried, there are other benefits to bringing these EVs across the ocean. Having a lineup of different EVs of different sizes and prices brings in different potential buyers. Frankly, as routine and obvious as it is, having a super-low-cost model that you can blast across the airwaves, on TV commercials, and in digital and print ads is an excellent way to pull people into a Volkswagen dealership, and then upsell them an ID.3 or ID.4. Historically, it’s been a big part of the game. Volkswagen could carve out a significant portion of the market for itself by doing this, especially since no one else seems to be doing it.
GM is discontinuing sales of the Chevy Bolt EV and Bolt EUV at the end of 2023. As far as we are aware, there will be a huge hole in the market in that size and price segment when that happens. We’re not aware of any other models coming into the US in that portion of the market. The invitation to bring the ID.3 and ID2.all to market is like the most gigantic billboard. This is a once-in-an-era chance to significantly grow market share and mark yourself as a true leader in the electrification of transport. Imagine how many ID.4, ID.3, ID.2all, and ID.Buzz EVs Volkswagen could sell if it brought all of them to the US? My bet is that it could easily double its US market share.
More likely than not, though, Volkswagen is going to ignore this opportunity, just like others are doing. More likely than not, this segment of the market will sit empty and neglected. More likely than not, the chance for significant market share growth will pass legacy automakers by. And then Tesla will bring its “Model C” (or whatever its lower-cost model will be called) to market and gobble up more market share, continue its disruption of the US auto market. Prove me wrong, Volkswagen. Prove me wrong.
Related story: The VW ID.4 Is Cooler Than I Thought — 6 Features My Tesla Doesn’t Have
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