Volkswagen cuts ID.3 price in China - now starts from $16,500

The expanding Chinese market for electric vehicles (EVs) is still in the midst of a price war with the Volkswagen ID.3, produced by SAIC Volkswagen, seeing a notable 16% price cut. The popular electric model now starts at $16,500, dropping from its earlier price of $19,700. The price reduction is part of Volkswagen's effort to combat the intensifying competition and capture a larger market share in the world's biggest EV market.

SAIC Volkswagen, a collaborative venture between SAIC Motor and Volkswagen, offers the ID.3 in two distinct models: a base version now priced at $16,500, and a higher-end variant with a price tag of approximately $20,700. The Chinese ID.3 retains the European model's design and size, spanning a length of 167.8 inches, width of 70 inches, height of 61.7 inches, and a wheelbase of 108.9 inches.

Powered by a rear-mounted electric motor, the ID.3 generates a maximum output of 170 hp, combined with a peak torque of 229 lb-ft. The EV uses a 57.3 kWh ternary lithium-ion battery, providing an estimated driving range of 280 miles, following the China New Energy Vehicle Test Procedure (CLTC).

Volkswagen's pure electric lineup in China mainly consists of the ID series, including the ID.3, ID.4, and ID.6 with the all-new ID.7 (called Vizzion in China) recently joining the model lineup. However, recent months have seen a slight decrease in the company's market share in the Chinese EV market, sliding from 3.2% to 2.9%. Volkswagen sold 11,302 pure electric models in China in May 2023, with the ID.3 accounting for 2,556 units.

Local competitors are playing a significant role in this shift, with brands like BYD and Tesla dominating various price segments of the market. BYD, with its aggressively priced models like the Dolphin and Yuan Plus, has garnered a substantial 28% market share. Meanwhile, Tesla's high-end offerings have ensured its solid presence in the premium segment, holding an 11% market share.

The Volkswagen ID.3 finds itself sandwiched between BYD's two popular models: the Dolphin, which is slightly less expensive, and the Yuan Plus, a slightly pricier option. Despite being similarly priced, the BYD models have demonstrated superior sales performance. In May, the Dolphin sold nearly 11 times the volume of the ID.3, while the Yuan Plus sold about 10 times as many units.

This substantial sales gap likely influenced Volkswagen's decision to cut the ID.3's price. With this strategic move, Volkswagen seems to be making a tactical pivot in an attempt to strengthen its standing in the competitive Chinese electric car market. Only time will tell if this move will rev up the sales of the ID.3, helping Volkswagen regain its lost market share.

On a side note - isn't it painful watching VW cut prices of ID.3 down to $16,500 in China, while in Europe the same vehicle starts at nearly $44,000? Sure - labor costs and materials are significantly cheaper in China, but the nearly triple price difference per vehicle sounds like an awful lot. It is simply impossible for the costs to be that much higher in Europe - this huge price disparity points to VW ripping off its European and US customers, desperately trying to cash in on the EV demand. Recent drop in electric car sales from the German automaker suggests the customers caught on what's really happening and are shopping somewhere else. No surprise then that VW is forced to cut shifts and production of EVs in Europe while bemoaning dropping sales - while its competitors post record-breaking sales.

Via