Volkswagen puts a lot of effort it o prepare the ground for the market launch of its Modular Electric Drive Toolkit (MEB) based all-electric cars, starting with the ID.3 model later this year.

One of the posts is an important cost comparison between the ID.3 and internal combustion engine counterparts in Germany, assuming all the factors (including incentives).

The official conclusion is that the total cost of ownership (TCO) of BEVs will be lower than ICE, and here we will check details (concerning the purchase, operation and resale), provided by the German manufacturer.


The purchase of the new ID.3 can be cheaper than a Golf model, according to Volkswagen, although it requires two assumptions: we are considering the most affordable, base version of the ID.3 (not available initially) and government subsidies (for the German market).

However, even without the subsidy, the price premium for BEV is not that high, compared to what it was like 5-10 years ago. In the future, subsidies will not be required.

"In Germany, the pure electric ID.3 models – available from summer 2020 – will be available at significantly lower prices than the predecessor e-Golf model. While the latter was available from 36,900 euros with a WLTP range of 231 kilometers, the ID.3 “Pure” model is available for under 30,000 euros – and that with a range of 330 kilometers, i.e. almost 100 kilometers more. Also, the ID.3 “Pro” has a range of 420 kilometers, with a purchase price of less than 35,000 euros – still significantly lower than the e-Golf. High economies of scale resulting from the use of the modular e-drive systems and the further development of battery technology make this possible.

The updated environmental bonus, offered in Germany since February 2020, ensures further savings. Pure electric basic models up to a list price of €47,600 (gross) are now subsidized with €6,570 (gross); for basic models up to €77,600 (gross) the lower subsidy rate of €5,570 (gross) applies.

The bottom line is that the Volkswagen ID.3 will be available in Germany from 23,430 €. This is noticeably below the price level of comparable combustion engines such as the Golf Life (see graph). Even the more expensive versions with larger batteries will be very competitive in terms of purchase price. Conclusion: While the purchase of an e-car was previously more expensive than a comparable combustion engine, the picture with the ID.3 is now turning."


Service life

Comparison of the running costs is easier, as BEVs are well-known for several times lower energy costs (while home charging) compared to fuel to drive the same distance. The maintenance also should be cheaper.

Volkswagen expects that the difference in monthly running costs might be as much as €70, but in general, the company assumes €50 a month or €600 a year.

"In terms of running costs, the ID.3 scores with clear benefits. For example, electricity costs per month are around 40 euros below the fuel costs for petrol or diesel vehicles.

Although the costs of wear and tear are somewhat higher for electric vehicles (especially since optimum range can only be achieved with more costly tires with optimized rolling resistance), these are more than compensated for by lower costs for insurance, vehicle tax and maintenance. For example, the ID.3 does not require an oil change and only needs to be taken to the workshop for inspection every two years – regardless of mileage. In terms of insurance, the ID.3 with its fully comprehensive class 17 level is on average three classes better than comparable combustion engines, which can mean savings of around 200 euros per year, depending on the no-claims class and mileage.

Overall, the ID.3 has a running cost advantage of around 50 euros per month or 600 euros per year over comparable combustion engine models."


Residual value

Finally, the residual value of ID.3 - it remains unknown for now. Volkswagen forecasts that the residual value will be roughly on a par with ICE counterparts.

The main reason for that will be a growing market for EVs and a slower pace of battery improvement in new models.

"In the past, e-cars were somewhat less stable in value than their combustion engine counterparts. This was partly due to the low market volume (there was hardly a used car market for e-cars) and partly to the rapid development of battery technology. This will change with the new generation of e-cars: Demand for used battery vehicles suitable for everyday use has been rising for some time – a trend that is likely to continue in the coming years. The ID.3’s range and charging capacity are sufficient for many customers, and battery technology will also develop more slowly in the coming years, so that there will no longer be a major discrepancy between new and used e-cars. The eight-year battery warranty (over 160,000 kilometers) offers additional protection.

Experts are therefore forecasting residual values for the ID.3 will be roughly on a par with those of comparable oil burners."


Total Cost of Ownership

Finally, the total costs of ID.3 in comparison with ICE - a slight advantage for BEVs means that we can drive pleasantly in an electric car, not pay a premium and even reduce environmental impact.

Hopefully, Volkswagen will be able to deliver on its promise and attract customers.

"In the overall balance of acquisition costs and running costs, the ID.3 scores very well. Depending on the model, it is sometimes even significantly lower than what customers have to pay for a comparable combustion engine model. This price advantage is also due to the government purchase premium. In the long term, however, the e-car will be absolutely competitive even without this support."

Got a tip for us? Email: