Small, Entry-Level Electric Cars Won’t Be Affordable, Says VW

JAN 21 2019 BY MARK KANE 323

Volkswagen warns about electrification of entry-level models

Electric cars for years were more expensive than comparable-class conventional cars. The higher initial prices were offset by lower costs of electricity (vs. fuel) and expected lower maintenance costs over a lifetime.

With mass electrification just around the corner, initial prices of BEVs were becoming more competitive, while performances is often better. Decreasing battery costs per kWh of capacity opens way for fast expansion.

However, according to Hans Dieter Pötsch Chairman of the Supervisory Board of Volkswagen AG, in the case of small, entry-level cars, all-electric versions are expected to remain more expensive than gasoline versions.

The fact is that it’s easier to electrify high-end, premium models, SUVs – or, in general, expensive and bigger cars. Small city cars require the lowest battery costs to become competitive.

Hans Dieter Pötsch said that because of that, electrified entry-level cars will become more expensive and “unaffordable for people on low incomes in the future”.

“We have the clear goal of making electromobility accessible to a broad section of the population, that is to make it affordable,”

“The current price level cannot stay the same if these cars are equipped with electric motors. Therefore, it will inevitably lead to significant price increases in the small car segment.”

If we understand it right, it seems that it will be far easier to achieve a high share of BEV sales for Porsche and Audi, than in case of Volkswagen, and the cheapest electric cars (e-up! for example) – at least in near term – will remain mostly ICE.

Source: Reuters

Categories: Volkswagen

Tags: , , , ,

Leave a Reply

323 Comments on "Small, Entry-Level Electric Cars Won’t Be Affordable, Says VW"

newest oldest most voted

Well, consider… Total cost of ownership. This reeks of service-fee headache for VW.
A Renault zoe can be vastly more cost effective than ICE VW up.

They do. Depreciation is part of total cost of ownership, and right now it’s completely trashing electric cars. Tesla only fairs better because they have poured trimendous resources in keeping the value of their used cars as high as possible. Most manufacturers can’t do this, and that will leave some very reluctant to buy even a cheap EV knowing they might be upside down in the loan in 3 years.

A large portion of that is due to the $7,500 tax credit in the U.S.

Yep. Your car in state of California is worth $10,000 less the second you sign the purchase agreement. As usual, government subsidies achieve the opposite of their intentions.

The car also ends up costing the buyer $10k less, how is that the opposite of intentions?

On top of that, once incentives inevitably phase out, all the used cars will appreciate in value.

The only downside is higher insurance costs because those are determined by the MSRP of the car.

Exactly! So there is no greater depreciation of the EV, since the owner in CA for example got ‘paid back’ $10,000 of the purchase price, so the ev costs $10,000 less which makes the ‘value’ $10,000 less at resale.

The ‘incentives’ are not for the ev owner to make a profit off the incentive, but to ease the purchase.

With the outcome making used EVs a very good deal for firs time ev buyers at a lower price point. A win for both the initial and second buyer of the same ev.

Ummm…no. The subsidy encouraged me to buy earlier than I would have otherwise purchased the car. It was intended to get Tesla to take risks in investing in the technology and to accelerate the introduction of EVs into the market. If the resale value doesn’t have a subsidy, I have haven’t lost anything – I just haven’t gained anything on the sale of the car. Cars depreciate, more expensive car loser more value because they have more value to lose – all buyers know that, I think. Finally, I tend to buy reliable cars (there is where buying a Model 3 is risky – no track record yet) and drive them until they drop. I don’t believe in looking at depreciating assets as an “investment” at all.

Electrics move off the dealer lot faster than ICE.
Looks like the used car market is mispricing EV’s and depreciation.

No, it only looks mispriced because of the effect of tax credits and subsidies. That Nissan leaf the dealer sells you in California for $32k plus sales tax is really only “worth” $22k plus the sales tax on $32k. It’s worth that because thats what you and others (the market) are willing to pay for it. I don’t think any auto maker has the ability to lower the price of these vehicles to the post tax credit price without loosing lots of money. It will be interesting to see what GM does with the Bolt’s price over the next 18 month and how it’s sales hold up.

It’s no accident that GM has decided to shift the focus of it’s EV development to Cadillac.

Well that’s also because obviously there’s a lot more production of ICE vehicles.

I hope you are right, bur unfortunately I think things are going to change with the higher range EVs. I really want to pick up a used, higher range EV cheaply.

Well, you can pick up a MS for a decent price.

Watch this video before you try to buy a used car through Tesla. The process can be a nightmare.

Depreciation is due to poor battery management. No one wants to buy an EV that will degrade its battery quickly, but often times new buyers don’t care as they plan to sell right after the warranty.
Tesla batteries are well managed so their prices stay high.
People learned what cheap ICE cars last and which don’t, the same will happen with EV’s.

the unfortunate part about that is most people aren’t that fascinated with the subject and all’s they’re going to hear is that at so and so many miles the battery dies and cost you more than the car to replace it and it will turn them off of EVs.

Buying a 5 or 6 year old used 24 kWh Leaf, for around $6. k, with approximately 20% battery degradation, is good for a short commute, or around town errands.

But, in about 3 more years, when the battery loses another 10% of its original capacity, who will be willing to put approximately a $9. k New Nissan factory battery into a $4. k 24 kWh Leaf, that is 8 or 9 years old ??

i actually have a 2012 Leaf. It is worthless. Totally worthless. I drive it to work, but i can never sell it and when the mileage gets to around 40 or 50 usable real world miles what to do with my $37,000.00 car? Throw it away, I guess. Never again. Hear me car companies? No? Okay then. Never mind. #usedcarsforever.

It isn’t worthless, you just have to be realistic. It now has the same range as an electric bicycle, and the battery has no thermal management, just like in an electric bicycle. So it is worth as much as a used electric bicycle.

Used is the only way to go. I’m in the same boat. Waiting for those sweet used bolts or model 3’s. Can’t keep driving my used Leaf forever. Probably got 2-3 years before it can’t do my commute.

That would be under warranty. Plus the pack is still good for home storage.

No you buy a used but good pack for $1k.
Better buy a used Volt with great battery life and unlimited hybrid range.

Actually, tesla does not fair better, they are the BEST of all cars right now, in terms of resales.
And no, it has nothing to do with Tesla trying to keep their values up. It has EVERYTHING to do with their building a top notch car (the MS) and ppl finally realizing it. MX is holding value now. It remains to be seen what M3 will do.

As to the rest of the EVs, yeah, the fact that you can buy a 30K leaf for under 10K in 3 years, spoke volumes about it. NOW, it appears that is changing.

Oh, I think Tesla’s CPO program has a definite impact on the average price of used Tesla cars. Tesla was, and is, clever to control their own aftermarket to prevent too much depreciation.

That’s not the only reason for high prices on used Tesla cars; the other factor is the high demand for them, partly because of the limited supply.

Tesla has ended their CPO program a year ago. Tesla only sells USED Teslas now.

Also, Tesla’s Supercharger Network, with progressively more and more Locations With Superchargers, closer spaced, is also a growing value add, for All their current and future cars! The Poor little 1st Gen Roadster, with no access, is more like a Bolt EV: First “Affordable Electric Sportscar”, for the well heeled!

this makes used EVs a great buy. The Chevy SPARK EV was a best buy even new for over 5 years. As a used car they are a super value. I have had 3 and love them. I end up selling the one I have to friends that beg me to get it. I never add to the cost just sell it for what I get it for and get another.
One was a SALVAGE title car for only $4K 2,000 miles just a hood and fender bump. I wanted to leave it dented but my friend who I sold it to wanted it 100% nice Still a great car 3 years after. Only ended up $7K all fixed nice.

Used Spark EV’s in Canada (Quebec, mostly) “Start” above $12,000, and go up over $15,000! As seen on Auto Trader!

2014 Spark EVs are hard to find used for under $8k. They were sold in California for about $16k after all tax credits/rebates. So they lost 50% over 5 years. By comparison the really underpowered 5 speed manual gas version of the Spark sold for about $14k and you can find them for $4000 – 5000 used.

Percentage wise the EV fares much better, in absolute dollars it fairs much better and if you add the $3000+ in fuel savings over 5 years and the zero oil changes the absolute savings are obvious.

PS Most people who finance a gas car with a 5 or 6 year loan with nothing down find themselves upside down at the 3 year mark. Most people are upside down the day they drive off the lot. Heck, a lot of people roll their upside down loans into another new car and end up even more upside down. Little to do with what cars they are buying and a lot to do with just not being very good with their finances

The Zoe is a much bigger car than the UP. Also much more expensive.

TCO is a hard sell, pay now or pay later, most will pay later.

America has a shockingly bad education system, where 3rd grade math isn’t used by the vast majority of America after high school.

Operational Expense, isn’t a concept taught.
Or, budgeting, or economics.

We Americans don’t need that whole science/math nonsense. We go with our gut, which seems to always steer us ‘right’.

Lighten up people, it was a joke.

Okay, that was a good laugh, thank you 🙂

There is a craps table in Vegas waiting for you…

I gave a thumbs up, as I was assuming this was political sarcasm, but without the /s – It’s a bit hard to tell..

And, the more it’s used, the bigger it gets!
/S. 😁 (The “Gut, that is!)

People budget just fine and the American educational system seems to fare just fine in Math. The average person’s budgeting doesn’t allow for “carrying” the current capital expenditure of an EV to support future TCO benefits. That’s the very reason why the deeper your capital is, the greater your returns.

The bigger problem in America is that there is such a wide gulf between rich coastal people who have managed to shut out anybody in a different class situation (I was at a business meeting in SF where this guy was bragging about how a pickup would never dare enter the city) that they don’t even understand the basics of what someone earning an average salary needs to do to make ends meet. This is in a country where the average income for a 4 person family is $60k. If someone cannot understand budgeting for someone at that level, what chance do they have to understand the budgeting needs of VW’s average customer – who are mostly in Asia and South America?

The wealthy man buys good-quality boots for $100. They keep his feet dry and last 10 years. The poor man doesn’t have $100, so he buys cheap boots for $20. They leak and last one year. After 10 years the rich man has been comfortable for $100. The poor man has spent $200 in order to suffer. (Not my originial story, but I can’t remember the source.)

That is why at one time, America was the builder of top quality products. We need to return to that.

When was that time? It wasn’t when I was a kid. That’s when the Big 3 US carmakers built garbage vehicles that broke down, rusted out and guzzled gas, opening the door for a flood of imported cars.

True, and if you follow newspapers that actually print stories on real economics, you find that prices in poor neighborhoods are actually higher than rich ones, because the stores in bad neighborhoods have to pay more insurance and “shrinkage”, a code word for shoplifting.

it’s called the cost of being poor.


I know a few people who like to complain that the poor people have all of their money

Or, is Poor just an Attitude, whereas Broke is a Temporary Condition? That’s what my broke parents said!

But it also varies on the individual situation. I don’t drive very many miles so in the beginning the main savings with an electric car is fuel savings so with someone like me that’s not going to be very much. Repair costs don’t kick in until much later.

It will be intresting for leases. If its cheaper to lease the ev – the fuel costs than the ICE.

Banks don’t loan on “Well, consider… Total cost of ownership. ”

Most buyers in the entry market are financing and the price of the car is the price of the car. Not some great (or imagined) price reduction via fuel or maintenance savings or even a tax incentives; all of which occur months or years down the road.

Fleet managers do math.
Anyone educated, knows Operational Expense.
Anyone driving a Prius.

Again, operating costs have ZERO to do with getting/qualifying for a loan.

That in itself is failure of the financial system.
The ability to get a loan is supposedly predicated on the ability to pay it back.
If running costs are not a part of that story, then bankers are just showing their inability to see past BAU.

The problem is that consumers won’t take the 5 minutes to make their case.
They hear “no” and choose to whine about it, instead of doing something about it.

You seem to think that people actually deal with humans at banks. Yes there is a human interface but the decisions are all based on the numbers.

Right. If your credit score isn’t high enough, or your income isn’t high enough, for the charts which the loan officer uses to tell him whether or not you should qualify for a loan, then no amount of explanation on your part is going to change his decision. Hard to get a chart to change its mind.

Aren’t most of the savings in the early days fuel savings? If so then someone like me who doesn’t drive a lot of miles because I live close to work how would this total cost of ownership factor in? I already thought about it and ran the numbers if I switch to an electric car, which I plan on doing eventually, my fuel savings per year would be around $500 or so once you factor in the additional electricity I would have to use to charge the card at home. So my first year of savings would be eaten up by installing a charger at home.

Or, instead of buying a “Charger” for $500, use the 120V cable that came with the car! Because your commute is short, that would do you just fine!

Even though it is slow charging, you normally just charge to 80-85% full, anyway, so, if it was charged up to full on the weekend, on Monday you might just charge for a couple hours, and Tuesday to Thursday, maybe 4-5 Hours, on average.

If you drove a lot daily, like over 100 miles, installing a 240V charging station, would have more value, and advantage.

I don’t see how that comparison is valid, does a Prius cost a lot more then any other comprable class of car that uses more fuel? The point being debated here is whether or not people can afford a car that they previously wouldn’t have been able to considering the lower TCO.

My neighbiur just sold an Audi 2.0T and got a hybrid Toyota. His main concern was TCO. Second one was fuel consumption…

A good bank will.
When I purchased my 2013 Volt, the bank initially declined my loan request.
After a 10 minute conversation with the loan officer, armed with an accurate budget, I demonstrated the Volt was going to be cheaper than the car I currently had.

The bigger problem is that most people don’t have or make budgets, and most assume that a decision is final.

It is rare exception to the rule. Even when you take much bigger mortgage loan in the US, decision is taken by automated underwriting software, a human just inputs numbers (which also may be done wrong/incomplete, but it is another story). Some may use option of manual underwriting, take responsibility, service loans in-house, but nobody wants to waste time on it, time is money and risk is not worth it.

And I would not say it is wrong, you don’t want every loan underwriter to invent his own rules and “go by the gut”. Imaginary fuel tax savings comparing with lowest mpg gas alternative may help for advocacy but don’t help when you are at default risk. E.g. out of work, don’t commute, but still need to pay high fixed loan payment at the end of a month. Average is pure metric when you need to meet peak requirement.

It’s nice that you managed to get a rare exception to the rule, but it’s still the rule and exceptions are still rare.

Most buyers at the entry market are not buying new cars. They buy used. Before buying EVs I always bought used cars as you can basically pay a little more than half price for a slightly used car. Fact is you can’t buy anything used that is remotely comparable to a Model 3.

That’s right.
Let depreciation be your friend!

Even now when things are looking up financially I won’t ever buy a new car.

Just have a to wait a bit longer for a nice used M3.

But they SHOULD. If getting an EV is going to save you $100 in gasoline costs each month then that SHOULD be considered.

VW, with no mass produced electric product, says something…

E-Golf. Sit down and shut up.

They do not seem to produce very many right now, to be fair.

eGolf is mass produced?! Lol…good one!

I’m looking at Norway’s top 3 selling cars in 2018 – Leaf, i3, e-golf. These cars are exceptionally popular in Europe.

That’s nice, but there are more people in Los Angeles county than Norway.

We know we know southern California is the only thing that counts

VW sell TWICE more EV that telsa in the EU, in fact VW sold 100000 EVs in 2018 … tesla sold 225000 and is a 100% EV car maker … the eGolf alone sells more then all the teslas sold in Europe !
You are a bunch of ignorant rednecks !!

Don’t forget the e-Tron or the upcoming Taycan. I consider them mass produced.

Those WILL be.

The e-Tron won’t be stocked by dealers in the U.S.; special order only.

In the U.S. at least, it’s just another compliance car.

The Model 3 isn’t stocked either. it’s built to demand, just like the E-Tron.

There are display/test drive Model 3’s however, just as there are/will be display/test drive E-Trons.

IIRC, they sell something like 10-20K globally. It was less than even the MS just in Europe, China, OR America.

Now taking bets for how close to start of production VW gets before we stop hearing “vapourware” jokes. My bet is that people will still be bitching about VW’s lack of commitment to EVs until they outsell Tesla. VW looks to me like the most promising next big step in EV volumes outside of Tesla and China.

Even if VW does outsell Tesla people will still complain about it being vapourware and #dieselgate.

VW is going to be a leader in the EV revolution (as a said here years ago) because they have to. Europe went heavy diesel to avoid high gas costs, mostly perpetrated by the EU governments, but now that bet has gone wrong in a big way. The biggest issue right now is charging in the EU, which is woefully behind.

VW being the king of EV vaporware isn’t a joke; it’s the reality.

Now, if VW really is doing an about-face, as all reports indicate, then that’s wonderful for the EV revolution. But as they say: “Forgive, but don’t forget.” Some of us, many of us, are going to forgive dieselgate, nor are we going to forget the decades of VW cranking out an endless stream of utterly false EV vaporware claims.

Some people seem to have very short memories when it comes to the history of the EV market. Fortunately, some of us take the longer view.

It’s almost as ridiculous as somebody who just started a rocket company talking about humans living on Mars in a few years….

I looked at the Zoe when buying my current EV for my commuting needs.

Going with Zoe required me to rent the battery. The minimum cost of the battery rental was as high as my monthly petrol costs with my previous ICE vehicle. So on that basis, and without even factoring in the cost of plugging it in, the Zoe was more expensive for me than an ICE vehicle.

I will note that this was on the second-hand market, so the cars I was looking at were a few years old, as were the batteries and the rental deals associated with them. The equation probably changes depending on how much milage you’re doing as well. I haven’t looked at a new Zoe, so I don’t know if the same costs apply now, but it was enough to put me off the car.

Looking at used ice cars isn’t really a fair comparison. Used electric cars can be had for a third or less of their original cost.

Some can. Others like Tesla can not.

Why is that? I mean I would imagine if the total cost of ownership is so much lower and they rarely break and they require almost no maintenance then the resale value should be better.

Used Leafs have a very low resale value because of the uncertain nature of how long the battery pack will last… or not.

If other EVs suffer from the same extreme depreciation, I don’t know why. A lot of people talk about the tax credit being a hit to the resale value, but that should be only a fixed amount; it shouldn’t cause the price to drop more rapidly over time.

You can buy the Battery when buying a second handed Zoe from a Renault dealer. Also the good thing is that it’s not only the battery rental but also some other things included in the price.

The Zoe is a great car for commute and drives very well for it’s segment.

But if you’re comparing like-for-like, in other words a loaded Volkswagen Golf versus a loaded Volkswagen ID neo, which I want by the way, the Neo is going to cost more and depending on how many miles you drive it’s going to take quite a bit of time before your fuel savings and possibly repair savings make up that difference.

” A Renault zoe can be vastly more cost effective than ICE VW up. ”

Depends where you live !!

The long range Zoe cost as much as an comparable ICE here 17K incl. salestax.

Fuel savings, insurance maintanance are arround 900 cheaper ( 25kkm / year ) but you pay additional 119 / month to rent the battery

With the new BEV technology, the ‘affordability’ has to flow down from Premium to consumer brands over time. Premium Large Car/SUV = $70K+ (Model S/X) Premium Midsize Car/SUV = $50k+ (Should be I-Pace) Premium Compact Car/SUV = $35k+ (Model 3) after fuel savings, $32k The difference with price for the BEV vs and ICE vehicle is the aprox $3,000 is fuel cost savings vs electricity that has to be pulled from the purchase price. Which is a real savings year after year. Meaning that the $35k car has a net cost of about $32k the first year, and $29k the second year, and $26k the third year, and $23k the fourth year, $20k the fifth year and $17k the sixth year at the end of many auto loan schedules(this keeps going year after year). But after 6 years of ownership, the savings with buying a BEV vs an ICE vehicle is about $18k, while the value of the BEV remains higher than and ICE model….especially for Tesla models with over the air updates adding new features consistently year after year. Which indicates today, BEVs are more viable as premium compact or consumer midsize at the lowest price point, and the… Read more »

The car on the picture is the ID, which is surely not the “entry level” for VW globally. It’s kind of Golf-sized, and VW in Europe also has the Up and the Polo, which are smaller than the Golf.

Indeed, he is talking about 10-15k Euro cars. There’s no way to make electric cars with a decent range at that price point. Maybe in the very distant future with battery prices below 50 Euro / kWh (if this is even possible).

People often underestimate how cheap a combustion engine is to build. It may be complicated and have tons of moving parts, but after making billions of them over the last century we sure know how to manufacture them for cheap.

Another Euro point of view

Yes indeed, a combustion engine is amazingly cheap to build considering all moving parts. One thing that I never understood is that apparently an electric motor is a unsuspectingly expensive item despite its apparent simplicity. And we also make electric motors for more than 100 years. If someone here has a clue of why it is so expensive I would welcome this information. Maybe because it has to be impeccably balanced because of such high rotations ? Expensive materials ? (rare earth ?)

It’s not the electric motor it’s the battery.

That’s correct. Electric motors, which run basically forever, are around $400 or less depending on the vehicle size. ICE around 4k-6k and that’s not everything. It’s all about the batteries as you say.

Another Euro point of view

Do you have a link which would point to that sort of price for a electric car motor ? My findings where more in the USD 2-3k territory if I remember well (looking at DIY electric car conversions sites).

Check the Munro teardown of the bolt. They estimated the motor significantly cheaper than equivalent combustion engine.

Page 24

Another Euro point of view

OK Thanks, seen. They mention in that report that the electric powertrain of the Bolt is 16% less expensive than the complete ICE powertrain of the Golf. Which is not so surprising as a ICE needs a more complex gearbox + exhaust pipe etc. Now this is only Munro’s opinion but I guess a car maker would have no incentive whatsoever to discuss real costs with outsiders.

It is estimated around 10-15 EUR/kW for OEM cost. Plus the same for power electronics.
Lower end assumes high volume production, but it isn’t very high now compared to ICE.

Whole gas drivetrain 35 EUR/kW, diesel 50 EUR/kW in comparison.

Table A2: Powertrain costs (OEM purchase price)

So you may save a 1000 on drivetrain, assuming high volume production. But you need very cheap batteries then to make it cost competitive to sustain the sales volume. Subsidies and no gas/road tax will help at the beginning, but government budget will run out money eventually.

For current generation of Li Ion batteries, the cost is already down to 70% being raw materials cost. Some weekly battery breakthrough may materialize /s, but it seems solid state batteries are getting postponed, and Tesla still buys basically the same Panasonic NCA as it was introduced in 2009-2012.
*note 4.0 Ah silicon base version never materialized

Another Euro point of view

Thank you very much for this very detailed answer !

The Model S is cheap (like 200-300).
The Model 3 motors are more expensive, but still less than 400.

In addition, we own a 2013 MS. Our motor was one that had issues.
It was $1200 to replace it and electronic inverter (the other cylinder side of the motor), labor, etc.

So, your findings are way off.

I think we may be arguing past each other. Whether the price of the motor does or doesn’t include the integrated motor controller (including inverter) may depend on who is talking.

Sandy Munro said the Model 3 motor costs something less than $800 (maybe around $775, I can’t remember his exact figure) to make. I didn’t think that included the motor controller/ inverter, but maybe it does.

I believe $400 is manufacturing costs when mass produced. So a retail price would be 50-75% higher. Motors used in DIY conversions aren’t mass produced so they don’t have the economies of scale advantage of mass production and thus cost more.

You can buy a Mustang engine for 6-7k new (retail). Your average 1.5-2l Honda/Toyota/Ford engine is probably closer to $2-3k and a transmission is probably in the region of $1k for the manufacturer (if that).

That’s a pretty cheap electric motor. I know it’s not an exact comparison but I work for your water and sewer authority and our pumps are mostly just electric motors with an impeller on the bottom and I never see one for less than $4,000

$400? I think your number is off. Sandy Munro claimed figures between… can’t remember exactly, but I think it was around $750-850 for the motors in the Model 3, the Bolt EV, and the i3.

Another Euro point of view

Yes indeed the battery is the most expensive but I was amazed of the cost of motors, which, even if a lot less expensive than the battery, is surprisingly expensive. I looked into that when looking at the DIY electric cars conversions sites. Of course the prices mentioned there are retail, but nevertheless I read figures of several thousand dollars. A Tesla Model S drive unit (agreed, including more than just the motor) is supposed to cost USD 6’000 if bought out of warranty. If someone has a link to price list of electric motors for EVs it would be welcome. There is a second hand Nissan Leaf motor for sale on eBay at USD 1’500 so obviously the retail price new must be much higher and the wholesale price perhaps around that USD 1’500 figure. That’s combustion engine territory.

Another Euro point of view

Here a link showing electric motors used for conversions, they do not come cheap:

Another Euro point of view

Continuing this conversation with myself. In the link above the electric motor I found which would have the same rated power as say, an eGolf (125kW although I think an eGolf is a bit less) is sold USD 7’900 (model Curtis 1238e-7621 HPEVS Dual AC-34 Brushless Motor Kit – 96 Volt
As this is retail let’s imagine that a car manufacturer would source this motor in large quantities for a third of the price, that would still be USD 2’600.

Yes, expensive, no clue why, except, still small series?

Sandy Munro estimated the manufacturer cost of the motors in the Model 3, the Bolt EV, and the i3 at something like $750-850, with the Model 3 being the lowest cost.

The motors aren’t the expensive part. It’s the batteries. At $200/kwh in a battery pack (i.e. not just batteries, but assembled into the pack), that’s $8k just for the batteries in a 40kwh pack that’ll only go 150 miles (maybe 200 if the car is really small). Gas engines, manufactured in huge quantities by very mature processes, are still much cheaper.

Will battery costs come down? Sure. But they need to come down a lot before there’s purchase-cost parity with an ICE.

No one in the world is paying $200/kwh, that was 5 years ago.
Almost everyone is around $120 now, and Tesla is approaching $100/kwh.

Tesla is approaching $100/kWh at the cell level not at the pack level. This is from Musk in 2018:
“We think at the cell level probably we can do better than $100/kWh maybe later this year … depending upon [stable] commodity prices…. [W]ith further improvements to the cell chemistry, the production process, and more vertical integration on the cell side, for example, integrating the production of cathode and anode materials at the Gigafactory, and improved design of the module and pack, we think long-term we can get below $100/kWh at the pack level. Which is really the key figure of merit for a car. But long-term meaning definitely less than 2 years.”

And if you watch Rich rebuilds, you find that it is more cost effective to take apart a used Tesla and then use the battery and motor to power a car converted to EV from ICE than to do so with the parts purchased elsewhere.

Right. The price for an EV motor with good performance (that is, not a cheap low-speed DC motor) from a supplier for conversion cars runs about $2000. Assuming Sandy Munro isn’t that far off on his estimate, Tesla is making Model 3 motors for less than half that. Of course, that’s comparing price to cost, which is not an apples-to-apples comparison.

“At $200/kwh in a battery pack…”

Your figure is very outdated. Tesla’s price is probably down to something like $125/ kWh at the pack level, and other EV manufacturers’ costs probably aren’t that much higher. And costs are still dropping rapidly. If I recall correctly, Elon said Tesla projects it can get pack-level costs down to $100/ kWh or less in about two years.

uh no. Electric motors are dirt cheap to make. A couple of hundred bucks for a tesla motor.

It is the cells that costs money.

Not much use having a cheap ICE if it is banned. China has said they will ban the ICE before 2040. Many other countries will follow

Most nations will ban new sales by 2030, if not 2025.
China really does not care one way or another.
They will likely just ban oil imports, except where it is already pre-paid (for example, they have multiple Latin American nations that are giving them 60-80% of their oil output).

Most nations that have plans in place are talking 2040, and that’s just pure ICE, not hybrid/PHEV. There are a couple talking about 2030, but none I know of are talking about 2025.

IIRC you are right. It’s a few cities that plan to ban ICE as soon as 2025.

So you think that most countries in the world will ban the sale of gasoline powered cars within the next 6 years?

Why not just require cars to be rocket powered by 2040. A lot can change by then. Its a silly “requirement”.

Yes you are correct so let them eat cake if they don’t have bread…

I wonder what is the cost of building these engines.

Nothing. They are built automated.

EVs are much cheaper to make, except for the battery. That is coming down. In 5-6 years, even the low-end EVs will be far cheaper than any ICE vehicle.

Labor costs are still a thing for Germany. India & China will likely be where Cheap EV’s of $15,000-$20,000 come from.

Yes, auto makers are able to make an ICEngine for an amazingly low cost, considering it has 200 to 300 moving parts! And the transmission, too. That has been achieved by over a century of efforts at cost-shavings by multiple auto makers.

It won’t take anywhere near a century before much less complex EV powertrains are cheaper to build than comparable ICE powertrains.

Right. I saw comments to IEVs just the other day claiming that the e-UP was proof that VW can make an entry-level car for under $25k. But here VW is saying that’s not economically possible, so I guess the e-Up is a test market / compliance / limited production car being sold below cost.

The ICE equivalent to the e-UP (the UP), starts at less than half that, which is the point of the article.

I can see what he means. You can get a VW UP for 10.625 €. It will take a long time for an e-UP to have the same price. Unless you don’t need much range.
Even if they will offer the new e-UP at around 20’000€ (as rumored), it is still double the price…

There’s worst. The Dacia brand (belonging to Renault) which prices begin at 7900 € for way bigger cars than the E-up. This brand may not survive.

How can you be comparing Dacia products with VW? Dacia gets their technology from Renault 3-4 years after they put it in their cars. And they use the cheaper materials.
It is like you don’t understand why a BMW Series costs more than a Nissan Qashqai

I am not comparing VW and Dacia products. I am agreeing with the Nozuka and just give an exemple where the EV conversion will be even worse, on the price, than for the E-up, with a cheaper model.

The price increase on a cheaper model will be higher in proportion because the kWh of battery will be approximately the same.

They will enter the used car market at a lower price.
Most of America buys used anyway.

Yea, in an EV you have to offset the battery with the cheaper engine/motor and transmission cost.

That works well for powerful engines and dual clutch 10 speed transmissions, but with a 3 cylinder petrol engine and a five speed manual transmission you will only get a very small battery.

This is what we already see with Tesla. It’s easy to get high range and performance for a competitive price. But lower range and performance is hard to sell at a profit competitively.

There’s also the issue with the fuel economics. One of the reasons something like a Tesla can have a cheaper TCO than the equivalent ICE is because the owner of a vehicle of that size may well be travelling twice the average distance and comparing against a vehicle doing 25-30mpg.

Someone buying a cheap, small vehicle is probably doing less than average mileage and would be buying an ICE vehicle with in the region of 50mpg. If they’re only spending $700 on fuel each year, and it’s still costing them $300 in electricity then there’s really not much saving to be had there, even if they’re keeping the car for 10 years.

This is my point, I could afford a more expensive car but I bought a $25,000 well-equipped Volkswagen Golf a couple years ago as its practical and has good fit and finish. The mileage isn’t quite 50 more like 25 miles per gallon around town but even so I only drive 5500 miles a year on it so my fuel savings by switching to a an electric car would be probably around $500 a year subtracting The increased electricity cost.

I think those cars would do great with even 200km of range with CCS fast charging capabilities. If it takes around 15minutes to top it up to around 80% that would be a decent commute/City car. Who does a 1000km road trip in an Up?! So if they let the range around that it will be cheap enough to sell at a decent price.

Another Euro point of view

As many in this thread do point to the VW UP, never forget it’s the cheapest supercar around, here one overtaking a Ferrari on the Nurburgring :))

Unaffordable … in the future. Sound like he is trying to make a political argument against mandates.
How does he know what the future holds. Or is there a translation issue?

Now you still have the option to buy an ICE car for let’s say 12k Euros, but once they are outlawed or emission regulations get so strict that they can no longer be met with anything but EVs, then the only option will be a 20k Euro EV. That’s what he means with future.

Once ICE cars are no longer an option then private mobility will get more expensive.

There is no such thing as a $12,000 new car in the US, it’s not a problem because there are lots of used cars for that and less.

I’m poor and bought an off lease,certified,low mile,bumper to bumper warrantied,like new Volt for $12,000.Problem solved.

But if the number of people looking to buy cars like that jumps way up because they can’t afford new ones then the price of the used ones will go up also

In Europe there are a few. New cars for around 12-13k Fiat tipo for example.

The US is a tiny market for VW compared to Europe and China (they sell about 10x more in both those markets than the US).

The VW Up starts at <£10k (inc tax) in the UK for example (and <€11k in the eurozone).

Most mainstream manufacturers have at least one vehicle in their range at that price.

Mitsubishi Mirage and Kia Rio can be had brand new for $10k in the USA. Or at least they could have been within the last few years. I distinctly remembered looking into this a while back when the failed Elio was supposedly going to come to market and I was thinking what the maximum they could charge before a buyer looking for a new vehicle would opt for an extra wheel and more cargo space.

US is not the world, neither VW is US company.

VW Up – 8k-9k € before VAT, cheapest 44 kW manual model, depending on country.
And VW is no way cheapest brand in Europe.

By the way, plenty of new cheap small car choices at $12k and below in the US too. It is just that small cheap cars are unpopular in the US for many reasons.

They won’t be outlawed until 2030 at the earliest. By that time there will be cheap EVs too. Or cheap autonomous car services.

Yup. Anybody who thinks gasmobiles will be outlawed in 6 years, or even 10 years, is smokin’ some pretty good sh*t. There may well be a growing movement to ban them from city centers in some or many large cities, but no country is going to ban them from all public roads in such a short time. Even if every auto maker went all-in on converting to building EVs, it would still be many years before most gasmobiles are replaced. You can’t order people to replace their gasmobile with an EV if there aren’t enough EVs being made to do that!

In my country, there will be CO2 emission limits for new cars from 2025 onward (6 years from now). Initially set at 100g CO2/100km, it means all but the smallest cars will need to be at least hybrids. Then, in 2030 (11 years from now), that gets halved to 50g – only vehicles with a plug will be able to meet that benchmark (ignoring hydrogen), and by then I’m pretty sure pure BEVs will have pushed plug-in hybrids to near extinction.

Sure, the existing fleet will take a while to phase out. But new gasmobiles will be as good as outlawed.

They’ve been talking down regulations and pollution limits for years.

yeah, it seems like large incumbent corporations always like to deflect from getting regulated by claiming it’s going to hurt the poor people. Like it’s going to hurt their jobs. (The same crappy jobs that the large corporations have been working really hard to reduce wages and benefits and protections on for decades. Privatizing profits while forcing socializing the external costs.)

My guess is that most lower income people generally buy used anyway.

In any case, it’ll be very interesting to see how VW’s upcoming e-up! does against its ID Neo hatchback.

VW is certainly biased and not trustworthy, but it doesn’t mean they are wrong in this case. It is just basic math.

Problem is that the math is skewed. The price for driving an ICE car has been artificially low ever since they were first developed. The TCO of an ICE car for society is a lot higher than the TCO of an EV, due to:
– health issues caused by pollution and noise
– subsidies on oil
– environmental costs of oil drilling, transportation, refining
– environmental and social costs of climate change

There is no level playing field for EVs to compete with ICE engines until all costs are actually factored in. Instead of waiting for battery prices to go down (which they will) we should demand ICE prices to go up. But of course, people will revolt because you’re touching their wallet directly. They’d rather have we mortgage their children’s future and increase their chances to get asthma, cancer or whatever foul diseases that are caused by burning FF.

I still own a diesel car which I’ll trade in in a couple of years to get an EV (yes, money is an issue). But I would fully support my government if they raised taxes on diesel with 20 cents or more per liter. I guess I’m in the minority with that…

And cost is the issue – Most of the major direct subsidies on oil are in developing countries, where cheap fuel is quite literally a matter of life and death. The only reason tens/hundreds of millions of people can afford the staples (rice/grains) to survive is because their governments subsidise fuel costs. The subsidies in developed countries are more related to air quality and tax reductions for certain activities. A lot of the studies that consider tax rate reductions on certain activities don’t also consider the additional tax revenue from those activities (and some even include reductions on taxes that are targeted specifically at hydrocarbon production as a subsidy). It’s probably worth also mentioning that the environmental cost of the resources for EV’s are also not currently factored into their prices either, so in those instances prices for EV materials (whether that be steel for the body, or battery materials) would also have to go up – pushing up the cost of a BEV. As you mention cents at the end I’m assuming you’re in the US, where tax on fuel is basically non existent. In Europe there’s a whole lot more tax on fuel, hence the reason it’s about… Read more »

‘ost of the major direct subsidies on oil are in developing countries, where cheap fuel is quite literally a matter of life and death. ‘
I wonder if that’s true. According to this site ( the US susbsidized FF with 20.5 billions annually. That does not include the FF related social and health expenses. So I wonder how much money goes into renewables (and please ignore corn, alcohol and hydrogen).

It’s true there are environmental costs in the manufacture of an EV, so yes, we should calculate those to get a fair idea. But then of course we’d also have to factor in the environmental costs of winning, transporting en melting the steel and aluminium for an ICE engine, which is also a very energy-intensive process.

It’s a no-brainer that EV’s are a lot better for the environment, and that the environmental costs of burning oil in cities are huge but never added to the equation. Together with the FF subsidies, that leads to a skewed playing field.

I’m from Europe btw….

The US isn’t a developing country. By direct subsidy I mean selling petrol/diesel/fuel oil below the market rate – i.e. the government buys it for 80c a litre, then sells it to the population for 20c a litre (subsidised by the profits from oil production usually). That happens in many countries, and is done because transportation and farming in those countries would collapse if the fuel was at full price. There are obviously lots of other subsidies, but the vast majority aren’t direct, being calculated based on relatively arbitrary terms – for example (from your link) providing land below market value. This is a difficult and variable thing (for starters it depends on which country), but most countries provide companies the exclusive right to search for hydrocarbons on that land, but also allow other activities (such as farming, logging, fishing, housing etc) by other entities. The market value of that “land” is zero if if no one is looking for hydrocarbons there. Even if a company gave a country 1c per km2, that’s an additional 1c that the country wouldn’t have has otherwise. If the company finds hydrocarbon on that 1c piece of land then the government will take a… Read more »

the mandates are the first step in the evolution of individual travel methods that will be needed in the 50+ years of oil reserves left. as petrol increases due to reduced supply, there will be a demand, and perhaps the cost issue will benefit from more tech and innovation

“Unaffordable … in the future. Sound like he is trying to make a political argument against mandates.”

Looks to me like he was talking about current prices and costs, not future ones. He’s correct about that; it’s why Tesla still isn’t selling the $35k version of the Model 3.

Give it a few more years. Auto makers will figure out how to build EVs significantly more cheaply, just as they’ve figured out how to build gasmobiles much more cheaply over the past century or more. Scaling up production will also help a lot in bringing down costs.

> Small, Entry-Level Electric Cars Won’t Be Affordable, Says VW

If Elon Musk is reading this article, then he’s going to take this statement as a personal challenge. What comes next after Model Y, Semi and Roadster… why, of course, the really affordable entry-level Tesla.

But seriously, for me, this statement is a massive stake in the heart of VW’s plans because if you can’t electrify your whole range then you’re forever going to be fighting against yourself.

The other problem with this approach is that if (when) EVs gain enough marketshare to significantly affect the cost and availability of petrol (uh, gas) then it will have a knock-on effect of tanking the remaining sales of ICE cars. But if the bottom end of the market is not served by EVs at this point, then you’ll get a whole bunch of people who are effectively priced out of the car market.

There are some interesting and difficult-to-fully-predict socio-economic ramifications attached to a rapid switchover to electric cars, but this is one I hadn’t anticipated until now.

An “affordable” Tesla will cost like a top range VW car even in the next iteration. We are still waiting for something close to €35k from Tesla.

I would love a Fiat 500 sized Tesla. Maybe a 40kWh battery. That’s should still be 200+ miles in a car that small. I think they could do that for $20k by 2022. With the gas savings, it could have a very low total cost of ownership.

I’d prefer a Honda Civic Tesla first.

There’s no way it’ll be that price by that point in time with that amount of range. Having said that if I could get a Volkswagen Neo with a little over 200 miles of range for thirty thousand or less I’d be happy.

Exactly. Wall Street is watching.
Once there’s an appreciable effect on fuel supply, like this year.
Money for new Fracking and Oil Projects will Dry Up.

Solar & Storage is already cheaper than fracking, there’s no financial justification to continue to fund Fracking.

In the meantime Elon is shaking in his boots because he will have to offer a $44k model 3 in all markets.

Elon has already stated that even making the $35k Tesla at a profit is going to be a very hard challenge.

At this point in time Tesla can barely make any money selling a car for $45,000, the guy’s not saying forever but for now he’s correct

Makes sense. Even the cheapest EVs with decent range cost more than the top model sedans from the likes of Honda, Toyota and Hyundai – and most of those are built off of economy minded models or are of that ilk. The other factor the rich folks forget, those who can barely afford a new $18k car, do not usually pay very much in income tax, if they pay any income tax at all – so that Federal credit doesn’t get them any discount.

It’s all a matter of time, an $18K EV is impossible today but it won’t be in 10 years. Aside from the battery and EV is inherently cheaper than an ICEV, electric motors are dead simple, you don’t need a multigear transmission, you don’t need catalytic converters, you might never need a brake job. In Europe where the cost of gas is 2-3X what it is in the US the cost of running one will be much cheaper. There are new battery types with much higher energy densities or with much cheaper materials being announced everyday, most won’t get out of the laboratory but some will and when that happens the battery problem will be solved, it might not even take a new battery type, just the refinement of today’s technology.

Fuel is more expensive in Europe, but electricity is also more expensive and people drive less kms per year. People that drive a lot can have lower TCO soon; average drivers need to wait a few more years.

The cost of power is also 5-10 times the price in the EU. Just did some calculations yesterday – with a Tesla supercharger price of $0.51/kWh (as it is in Denmark), a family size diesel car would need to run 17km/l to have the same fuel cost as a model 3.
I know it is cheaper to charge at home, and that many other cost associated with a BEV are/can be lower than a comparable ICE. But take a VW Touran that is a popular familar car in nothern Europe. It can be had for some $10-20k less than a model 3, and those $ will pay the cost of gas and servicing for some 4 to 7 years.

Sure, but the Model 3 is a performance sedan, not a family car. You need to compare apples to apples.

The Model 3 is the closest comparison vehicle. The only other really comparable vehicles are the likes of the E-Tron and Mercedes SUV’s

True but I don’t think this guy was saying this is going to be the situation for the next two thousand years.

So if you do more than boast, and actually spend all these billions of dollars VW likes to mention in their press releases, you’ll eventually will have to recoup those costs, which may lead to the EVs you produce to become uncompetitive? Hmm… never would have thought of that.

It’s safe to say that the 30k price range is very likely. However a car with a decent range below 20k is not really for now. Or maybe They should sell a very basic Skoda Citigo/fabia kind of car with a 24-30kWh battery for around 200km of range. I would buy that though as a second car for small commute/city driving.

And for me $30,000 would be fine if it has the build quality and fit and finish of a nicely equipped golf. If they can bring the Neo in at that price I’ll take it

Define “basic”, though. Cut out all the baby steps towards Autonomous Vehicles? That might help a bit, but sensors and an embedded chip are not all that expensive. No air conditioner? Not where I live, bub. If you insist on a decent range and therefore can’t cut on the battery, the only other place to cut costs is fit and finish.

I owned a Dacia Logan once (actually built by Mahindra and then badged as a Renault Logan in my country). I bought it specifically because I needed something cheap in a hurry. Mechanically it was unbreakable. It will probably still be driving around when the giant mutant cockroaches have replaced us. But the interior started falling apart almost the moment I took possession. Is that where we want EVs to go?

He is right. Entry level ice start at 15,000 USD. Such a BEV needs a 50kwh battery to get 230 miles range. At a very low 100 USD per kWh the battery cost 5000 USD. Currently that price is closer to 200 USD /kWh so 10.000 USD for battery pack. Such a barebone BEV will therefore cost at least 20.000 USD and more likely 25000 USD.

If I remember correctly, VW not long ago announced that their cars will be half as expensive as Tesla’s. Based on the recent average price of the Model 3 at $60K, that would come out to be $30K for a VW ID. Taking into account tax incentives, fuel savings, lower maintenance costs and extra perks such as HOV privilege,.. that would put a VW right in the affordable category of sub $20K price.

Unless VW lies – again.

These entry level cars start around €8500 (for a Skoda Citigo with discounts)

7900 € for a Dacia taxes included.

Ok. Let’s take €8500 for a ICE Skoda Citigo. This price already includes VW profit. Then let’s remove an engine, fuel tank, 5-speed gearbox, exhaust, etc. and add electric motor, invertor and charger. Electric parts are less complicated, so let’s assume than it will cost €8000, without battery. Now, they announced that new 2020 e-Citigo will have 39 kWh battery and start from €19000. If battery module price is ~€200 per kWh, that’s ~€8000 for a battery. So, we have €16k for a whole car, with some profit included. But they will sell it for at least 3000 more and tell us that ist’s not affordable.

I made a mistake, new battery size is 37 kWh, not 39, so the battery pack should be even cheaper.

Another Euro point of view

The problem of all those back of the envelope cost estimations here (including yours) is that they assume that building cars is only parts and labor.
That’s less than 60% of the total cost of making a car. Other costs are administrative expenses (all those people dealing with logistics etc.), interest expenses (part of this capital intensive industry is financed by debt), amortizations (robots and buildings are amortized throughout their useful life), research and development, marketing expenses, insurances, etc.

Vag always lies.
30k € price for a id whit only 225 km WLTP

Base price for the 48 kWh version will be 26k-27k.

Mid range with 62 kWh battery, >100 kW fast charging, heatpump, augmented reality HUD, etc. will be <34-35k Euro

I paid 30K€ for my fully equipped 2009 Passat Variant DSG TDI 140HP. Now VW pretends me to pay ~10K more for an electric golf with a pyrrhic 300km range. They obviously DON’T want me to buy an e-car.

The wheelbase and interior room of the ID is closer to a Passat than a Golf. The 30km version should cost about the same as your Passat, not 10k more. If not before, then definitely after incentives.

The ID will be a far better car then a 2009 Passat … even compared to the actual Passat the ID will put the DSG TDI 140 HP to shame in every aspect.
I agree that 400km is not much … but can any one else offer better ? That is the real question.
EVs will be more expensive than ICE cars that’s for sure in the near future.

Where does that number come from? The confirmed base battery size of 48kWh should be enough for at least 300km WLTP range. If the “same as diesel” pricing pans out, the cost should start somewhere in the lower 20s.

Of course, considering the prices of competing vehicles and considering that VW will continue to produce and (try to) sell ICE cars, I very much doubt we’ll get the “same as diesel” pricing.

Correct at the moment, but assumes battery price per Kwh won’t continue dropping. Which is contrary to almost all experience with tech products. Like photovoltaic panels. Once the production got automated and to scale, price per Kw dropped steadily, and hasn’t stopped yet. And the batteries are the price determiner. The balance of system is far less complicated than an ICE.

This is just the latest in a long series of old-school auto executives making silly statements. It doesn’t really mean anything.

Battery prices have been steadily dropping, and density increasing, for at least the last 10 years. With all the added research being done nowdays, this should be expected to continue.

It has been slow and steady, which means you just wait longer. Already 200 mile range electric cars are a lot cheaper than they were a few years ago. And a few years from now?

People want 200+ mile range but under $25,000.

I wouldn’t mind paying €45K for a 300 miles decent, Passat-sized, car. But not more.

The Neo will be under that price tag. Here they are talking about cars to counter the 12k ICE cars and that will not happen yet.

Two words: So what? So people will just buy slightly used EVs which will be better than new entry level gassers. Also autonomous mobility will be killing the entry level and city car markets anyway in a few years.

Yet another reason PHEV’s are the great transition technology. A base Prius C is already around the $20k now. Configure a 20-25mile LiOn battery, slightly more power MG1&2’s, and factor in (up to) $7500 tax incentives depending on income and viola`; an affordable PHEV.

It will cover most daily driving in EV and won’t need expensive high voltage chargers or high C rate battery chemistry because it will use the ICE for distance driving and power situations.

There is no hybrid AIGO, for some reason – guess why!

There is a hybrid Yaris though, so what’s your point? That we cannot build golf carts with a hybrid engine? Yet?

Then what would be the point of making EVs, is what I’m seeing in his comments. Entry-level EVs are what the market needs, and fairly quickly; otherwise we’re just fooling ourselves that VW is all-in on electric.

They just want to squeeze more profit during ICE->EV transition phase and preparing buyers for that jump. I would expect more $hi# like this in the upcoming months.

(performances are, or performance is often better, either, or).

And thus begin the excuses as to why the VW affordable ev promised, with big headlines, just months ago.
Will not happen.

You gave us promises, promises, words you could not keep.

That will happen. Only not cheaper then 24.000 Euro/Dollar. Around 30k will happen though.

A €30k ID would be half the price of the Model 3, the cheapest Tesla soon to be available in Europe (It’s around €58-60k for the LR AWD). €30k is not a cheap affordable vehicle. In fact €30k is around the average price of a vehicle, and people would be looking at an SUV/CUV/larger sedan for that price, not a golf hatchback.

Basically they can fulfil their promise of a car half the price of a Tesla, but also still legitimately give that warning seen in this article.

Cheap, small cars are going to be one of the last segments to transition for the very reason mentioned – the cost of the technology is still nowhere near viable for that yet – the same reason Tesla still haven’t produced their promised $35k Model 3.

Yup. Nearly all the talk about EVs from VW spokesmen in the past has been nothing but hot air.

Now this VW spokesman is talking about the hard reality… the economic reality that, sadly, a lot of EV advocates posting comments to this thread are trying hard to deny.

Another thing to consider is the price of used EVs. New, entry level EVs might be too expensive, but used ones definitely aren’t.

Sounds like an Arcimoto opportunity.
Buy an affordable ($11,900) “fun utility EV” for 80% of your trips, .. hang on to the old ICE beater for the other 20%.

Problem solved.

They should do that indeed. Make very basic electric cars like the Skoda Citigo with a range of around 200km CCS fast charging and it will be a great car for normal driving. No autonomous things on it, just basic stuff. But so that you can sell it for under 13.000 Euro/dollar.

“Buy an affordable ($11,900) “fun utility EV” for 80% of your trips, .. hang on to the old ICE beater for the other 20%.”

It sounds like the same old story – if they don’t have bread, tell them to eat cake!
Few people on budget in a city will be able to maintain, insure and buy parking for a second car if they can barely afford one.

– Your old beater ain’t worth much, and you can drop insurance on that down to liability only.
– Motorcycle (Arcimoto) insurance should be pretty cheap.
– Arcimoto doesn’t take up much space, .. might be able to squeeze it in the same parking spot with your old beater — if your old beater is a compact.
– Arcimoto estimates 8 year battery life and $2,500 replacement cost ……
– I would guess Arcimoto should be getting 5+ mi/kwh,… so fueling (electricity) costs should be low.
– IF there’s any maintenance — the Arcimoto looks pretty darn simple — cost should be minimal. I could see plenty of hobbyists getting into modding/upgrading/repairing this.

//I don’t think the Arcimoto will be mainstream in the U.S. — but it could end up carving out a small piece of the pie. In other parts of the world (i.e. Asia, or anywhere it’s super dense urban) it could be a large chunk of pie.

Hmmm, maybe 80% of your trips when the weather is pleasant outside. Nice if you live in a region with year-round balmy weather and not that much rain. But most of us don’t live in Southern California.

I call BS. This guy routinely makes anti-EV statements that have little to do with reality.

He also – of course – conveniently ignores that fact that in most of VW’s main markets, EV subsidies are going to continue for the foreseeable future, in particular for BEVs.

Someone ask Kia what they think, they’re already undercutting the Bolt with a better car at a lower price. VW doesn’t even have a product yet.

Volkswagen has the E-Golf and the E-Up. It’s not much but better than many.
Also the Audi E-tron is practically here and already in production since several months.

At the equivalent of something like $21k USD, the e-Up is pretty clearly being sold below cost. That’s not a viable path to the future.

The e-Tron won’t be stocked by U.S. dealers; special order only here. That’s not viable either.

And the Niro is not a cheap, or affordable car, The BEV version is around 30% more than the basic hybrid Niro in the UK. The BEV is a £36k car. The hybrid Niro starts at £22k (or £27k for the top spec one). In US money that’s a $12k premium for the BEV over the premium hybrid version, and around $20k over the base model hybrid.

Way above the £10k/€12k cheap small car starting price.

What lower price?

VW said its compact EV it will cost as a diesel equivalent car. So if the diesel car is affordable, the electric ones will be too.

For compact cars like the ID Neo, which is the equivalent to a Golf. (A naked Golf starts at around 18k, but most are sold in the price range of 20k-25k, a bit more for the diesel versions.) He is talking about entry mobility, that’s cars below that in a price range of 10k-15k or even below 10k like the Dacia. You can’t build an EV at that price point when the battery alone is half the selling price, without any markup. (And without the rest of the car.)

If Renault will sell a electric car in China under 9000 soon, I can’t understand why a car about 12.000 will not possible in Europe. That’s affordable. Dacia will have its own EV. I don’t expect 300 km of range, but with 180 will be a nice solution for everyday car.

Those 9000 are after the very generous chinese ev subsidy (up to $10k)

Not that long ago VW claimed the ID would cost half of model 3.. If they can be trusted they will soon launch the 17.500 entry level version.. before incentives
Maybe not the cheapest car.. but imo that will sell in crazy high numbers👍

They never said that.

@Link said: “They [VW] never said that [VW ID would cost half of model 3].”

Yes they did…

VW said: “Here we come very strong now. We have invested 30 billion in electromobility, we have already rededicated a plant in Zwickau, and we are building an electric vehicle plant in Shanghai. We will come in 2020 with vehicles that can do anything like Tesla and are cheaper by half.” source:

Nice to see that some people don’t have such short memories!

Another Euro point of view

This might be another example of VW clumsy communication rather than a false or overoptimistic one. I see in the article that it was translated from German so this would probably part of an interview by a local journalist or a speech to a local audience. If I am not mistaken the timing corresponds to the announcement of the Euro prices of the Model 3, with are in the EUR 53k lowest price. So half of that is still a lot of money and into VW ID territory.

They will sell the Neo I.D. for around 30k in two trim levels. Here they are talking about entry level cars so 12-14k.

The cheapest Model 3 available in Europe is €60k – so €30k, which is in fact around the price of a mid range Diesel Golf.

$17,500? You are basing your argument on the still-mythical 35,000 dollar Model 3. Which may exist one day, but right now does not. Right now 22,000 would be more like it.

Frankly, I doubt they will pull even that off. But it will be fun watching them try.

Looks like they won’t be half price of tesla

Think they are talking about the entry level car here. Around 12k-14k. The Neo will be around 30K.

Somebody please show Hans Dieter Pötsch a Tony Seba presentation on Youtube! Preferably the latest one, uploaded in December 2018. On second thoughts maybe not. Might cause him to have a heart attack or crap in his pants!

Seba lives of the fact that there are people that like the moral of his stories. This doesn’t make his claims true.

Seba made his claims in a book published in 2014 and I first saw his presentation from a video, linked to in the comments section on this site back in late 2014. He projected EVs with 200 mile range, at a price point of $35k, by 2018. So, he was off by maybe a year. The “experts” and the mainstream analysts don’t get disruption so you won’t be able to find one that was even close. He also missed his projections on the falling cost of electricity from solar PV. Costs have fallen faster than he projected and people were saying he was crazy for thinking they would fall as fast as he said they would!

Well if an auto manufacturer needed to sell more EVs to meet a mandate they could switch the financing approach. Offer to lease cars as an all inclusive package (car, fuel, maintenance for 12,000 miles/year). There are probably tons of hedging options to cover the craziness of gas prices and the single monthly payment would be attractive. This approach would also be attractive to the finance world because it increases their business.

Couldn’t EV battery cells be recycled like lead batteries are. It seems like if you send the battery cells through a grinder then through a series of rising temperature changes at the melting point holes in a ceramic trough would allow lithium, aluminum, copper, cobalt. nickel etc to melt through holes. Probably would also need to be agitated or vibrated to help the process.
The sooner we figure out the recycling the sooner it becomes less expensive and more sustainable.

I had a 2000 Honda Insight hybrid that was the most fun car I have ever owned. I would get 60 to 80 miles per gallon. I don’t understand why the car manufacturers went away from that concept. If you put solar roofs on the cars I have no doubt that could be raised to 100+ miles per gallon. Taking the $8,000 for a battery cost someone claimed, which I think is way high, that comes to just 8 cents a mile if the battery lasts 100,000 miles. On my Insight it lasted over 130,000 miles. When you add in the cost of fuel at 4 cents ($3 divided by 80 miles per gallon). you have a fuel cost of about 12 cents a mile. That is pretty comparable.

The 2000 Insight was probably sold below cost, as a test market car. $8000 for a NiMH battery pack back in 2000 doesn’t at all appear to be an inflated estimate. Battery prices have dropped precipitously since then.

The only logical explanation for this message is VW is trying to encourage people to buy it’s ICE vehicles NOW instead of waiting to purchase an EV later. Like all legacy auto companies, they are between a rock and a hard place.

Or it’s warning that EV’s equivalent to their cheapest products won’t be available for some time. Not exactly a shock as it’s to be expected.

It’s VW though so the trolls will always assume the negative.

Given the long and rich history of VW vaporware, one certainly doesn’t have to be a troll to assume the worst about VW’s true intentions for making EVs.

Note the several citations in this discussion thread to VW’s over-the-top B.S. claims about making cars as good as Tesla’s cars, at half the price.

And here comes the biggest anti VW troll of them all.

Do you want to trot out that article from 2010 where they had about 7 aims for EVs, five of which they met, while you completely ignore the announcement of the MEB platform in 2016 and the subsequent 2019 target for the launch of the ID – which they appear to be right on schedule with.

The claim of a decent car at half the price of a Tesla has already been discussed, you’re right. Something at 30k euros with a decent range would hit that pretty well – that’s around the expected price of the ID.

How will they react if Renault is introducing its super affordable Renault K-ZE in Europe under the Dacia label?

The K-ZE is ~€18000 before subsidies and would be in the same segment as the ICE Skoda Citigo that is ~€8500.

Where did you get that price ?

At the time it was announced the price mentioned was the equivalent of €10000 after the generous chinese subsidies. Most sites at the time estimated that it would cost between 18 and 20k if released in Europe (before subsidies)

Ok, thanks. European regulations would make it more expensive.

Well, also higher chinese subsidies contribute in making it cheaper.

That would probably be affordable but very basic too. Lot’s of hard plastic etc. The Neo will be around 30k and have a bit better interior. I also heard that there is going to be an face lifted Zoe this year.

This all assumes that battery technology will remain as it is today? I think we might see some interesting improvements that will tip the scale.

“Where there’s a will there’s a way.”

They are a freackin.. morons. They wanna discourage people from Europe. The news mentioned all sorts of stupid things along. My favorite is that the EV cars price will be high because of the emission laws. I hope they get slapped in the face by Tesla here in Europe aswell.

VW is correct in saying that EV profitability can be reached first in the more expensive cars… Of course, they are looking at 8:1:1 as the next gen battery chemistry [$$]… As Tesla is showing us openly, it takes a lot of cost squeezing to make lower cost EVs profitable.
VW fails to mention the likelihood of used EVs being available at affordable prices to the masses. Of course, they can still make/import low end EVs in/from India or China… or cede the market to the Chinese.
With or without 3rd grade math, most Americans still recognize a deal, even if they hear about it from someone who does know math.

Just a week ago there was an article at this very web site with the title “Nissan e-POWER A Huge Sales Success: Why Not Add a Plug?”. It was about the Nissan Note (Versa Note for all you North Americans) e-Power (hybrid) that has become a sleeper hit in Japan. I was flabbergasted that I this car had sold over 200,000 units in Japan and propelled the Note to the top of the sales charts in Japan without ever being featured by this web site! I searched for more info on this technology and it is pure genius! Use the same drive train found in the Leaf and the eNV200 but leave out the charger and the expensive battery, instead using a tiny 1.5 kWh battery and a 1.2 L ICE generator as the source of electrons. They have produced a package which costs about US$6,000 more than the ICE only version, has better city fuel economy than the ICE only version and better acceleration than the Nismo (performance), supercharged ICE only version! Despite costing 35% more than the ICE version, some 70% of Japanese buyers have opted for the e-Power Note with it’s 80 mpg city fuel economy, fun… Read more »

Gas cars are a part of the past, not the future… The e-Power is just a blip in the transition.

The genius in the Nissan approach is that they get to scale their electric motor and inverter operations and tweak the efficiency and performance while they wait for battery costs to come down. While doing that, they provide excellent city fuel economy and mind boggling range (1000+ km per tankful) for their customers. When the price of a battery that can give them 200+ miles per charge drops below the price of the genset plus the wimpy 1.5 kW battery they use now, they can easily switch to pure EV. They are increasing their capacity to manufacture EV drive trains in the mean time and their customers will be more comfortable with their electric drive trains. Oh, and zero range anxiety!

Well, they finally “invented” hybrid. Good for them 😉

Meanwhile in the US you can still buy Honda Insight that is close to series hybrid for 2019 model, if none of the multiple hybrid offerings from Toyota suits you.

I’m confused….
Didn’t VW claim thet Neo will have a price similar to a diesel Golf? Is a diesel Golf nor affordable?…or entry level? Granted they have cheaper models, in my book, the Golf is still entry level.

There are two segments below the C-segment where the Golf fits.

I bet you Mark is still confused.

Do we share these across the world or US is exempt?

As a well equipped diesel Golf. That is €40k and hardly entry level or affordable…

No, the Diesel Golf in Europe is a mid priced car, at around €30k. It’s affordable to some, but it’s certainly not entry level.

The entry level cars from most manufacturers in Europe are around €12k.

In North America the Golf is considered a small car, and the Model 3 a mid size. In Europe the Golf is a family car, with the Model 3 being more akin to where the Pilot sits in North America.

He is probably right, my 2c is that this segment will be the last to fully electrify – it may be that humble Dacia’s are the last new ICE cars on European roads 😀
I see that many people are looking at this from an American perspective, where a sub-compact is a second car in the family, where its range is not much of an issue as it is mainly a city driver. But in Europe, this segment is very often purchased an only car in the family – so a range of 150 miles/240 km is just not going to cut it… Prices for this segment really start in the range of 10-13000 $ and getting 220-250 miles with roughly those prices is not that easy…

Another Euro point of view

Much common sense in that comment Zlatko.

I certainly agree that, for example, the e-Up, with its ~80 mile EV range, isn’t going to cut it for most single car families. And at that, its price, which would be ~$21-22k if it was sold in the U.S., is most likely selling it below cost.

Most people aren’t buying new vehicles period. No vehicle is affordable at these lowest levels. That’s why so many are buying used vehicles if at all. Obviously, a used electric vehicle will make much more sense than a used gasoline vehicle in terms of cost of ownership. But charging at home will be a huge challenge for them unless apartments start installing chargers en masse. For those lucky enough to have a charging situation figured out, it would make a lot of sense to go used electric.

I guess the 1/2 price of the affordable VW BEV was pie in the sky, they can’t even come up with a 1/2 price of MR Mod 3, let alone a SR MOD 3. VW king of PRESS RELEASES & CONCEPTS.

They are talking about entry level cars. So between 10k and 15k. The Neo is a higher segment and they probably can do that for around 30k which is not entry level.
We also have to see that 30k Tesla model 3. Here in Belgium it’s 66.000 euro for the version we can order now.

I have no doubt Tesla could make the US$35k at any time. At this stage in the game they don’t need to. At some point will all the reservation holders try a class action citing Elon saying “of course it will be US$35k”?
Now VW is aware Tesla stated $35k, and they have made a bold claim to be half the price of a Tesla (model not indicated, assumed to be Model 3), and no more than reasonable diesel.
Cheap versions of EV’s are possible, and cheap ICE have lots of compromises, so maybe the cheap EV will be limited range? If/once DC charging is ubiquitous then 150mi range might not be a problem for these cheap EV’s. Plenty of evidence early LEAF owners have driven their 86mi LEAF to all sorts of locations, just means more charges along the way.

Nobody really knows, but we have an idea and I’m inclined to agree.

There’s two precedents that support this IMO.

First there was small diesels. Small diesel city cars were going to be the answer to everyone’s problems, but it turned out the extra cost of the diesel technology added big cost’s to building and selling a car compared to the low tech petrol engines they were replacing. This priced them out of the market (not exactly helped by emissions regulation and diesel being less efficient in a city than on a highway).

Second we have the $35,000 Model 3, which doesn’t exist yet despite all of the hype and promises.

But honestly nobody actually knows what will happen. All we can do is speculate. The answer may be to offer a super low range car, or something built using recycled cells, or if it’s not economical offer nothing at all and hope that a refreshed EV public transport system can take up some of the slack.

Yeah well small ICE lawn equipment is also cheap but its still being replaced by battery powered equipment because of other reasons like not having to deal with nasty fuel and oil.

People don’t understand how incredibly cheap those small ICE powertrains are.

I guess that he implies that sub-compact electric cars will not be feasible because of high cost, tiny range, and so. For example, VW Up! (ICE) has a large range (almost 600 miles) and is much cheaper than VW e-UP!, which has so-so range (103 miles) and high cost ($22,740 vs $9,400 for ICE Up!).

Should say “will not currently be affordable”. As battery costs come down this will get resolved. In fact there is the potential in electric vehicles to be cheaper than ICE at some point. Same upfront cost, cheaper maintenance. Of course whether that happens first or whether cheap autonomous car services emerge first that obviate the need for many people to own a car at all is an open question.

I bellwe Mr. Potsch has it exactly backwards: EVs will be the only vehicles low income people can afford. With low cost electricity and near zero maintenance, driving an EV is already more affordable than a gasmobile.

In the near future, NEW batteries will cost less than $100/kWh, and electric motors, controllers, and related technology will be commodity-priced and last MUCH longer than gasmobile tech. Solar will be common in public housing and elsewhere, making EV charging essentially”free” for many while the cost of gasoline will inevitably rise.

Never mind electric scooters, motorcycles, and city cars.

But you can buy a new car for around 10k Euro. So to compete with that the prices have to fall a bit further. Those entry level ICE cars are really cheap and economic already.
Before solar will be “public” it has to go a long way, like what about flats that are 13 stories high and 30 houses wide. That are a lot of cars.

Good electric cars will be starting at around 30k.

Even a 10k Euro car is made with a very complex internal combustion engine, transmission, fuel system, cooling system, and emissions control system. On a cost-to-manufacture basis, electric motors, batteries, and controllers are vastly simpler, require less time and manpower to manufacture, and consume fewer raw materials (more so if EV batteries are recycled en masse).

A “good” electric car could be as simple as a Mitusbishi MiEV or Renault Zoe. Think about it: What costs more to manufacture: (A) 1 million tiny gasoline engines, transmissions, and fuel, cooling and emissions control systems or (B) 1 million electric motors, EV batteries, and controllers?

EV’s do not have near zero maintenance and low end cheap cars do not have complex BMW like engines. As such the cost to mantenance/repair of the powertrain on them is minimal. €100 for a few spark plugs every 5+ years, and €30 for some oil every year for example.

What both cars have in common however is the things that usually go wrong more frequently – largely related to age and rust. Suspension, body panels, steering, wheel bearings, frames etc. An EV isn’t immune to road salt or potholes and more than any other vehicle is.

Most of these sort of vehicles aren’t scrapped because they have engine problems, they get scrapped because the suspension goes, or the rust becomes too much and they are considered un road worthy.

The claim of near zero maintenance needs to die a death. It’s just wrong.

Do not be fooled by the high price tag of a BMW. Of a given size, internal combustion engines of economy cars just as complex as more expensive ones. All have similar emissions control systems, fuel systems, etc. Many tiny engines incorporate turbochargers, 4 valves per cylinder, variable valve timing, auto stop/start tech, etc. Motorcycle people would probably argue that smaller engines are actually MORE complex.

OK, I will give you credit for semantics about maintenance. You are correct that EV owners still have to rotate and replace worn tires, wiper blades, steering and suspension parts, and some other things common to both types of vehicles. However, the bigger picture is that EVs will NEVER need oil changes, tune ups, spark plugs, air filters, fuel filters, oil filters, emissions checks, alternator belts, thermostats, transmission fluid, timing belts, spark plug wires, coils, alternators, oxygen sensors, fuel system supplements, radiator flushes, etc. There are no transmission gears to strip, there is much less wear and tear on EV braking systems, and electric motors are MUCH less susceptible to catastrophic failure than internal combustion engines.

Basic, cheap engines in small econboxes are significantly less complex than the more powerful engines in more premium vehicles. it’s not just the cost of the labour that is increased. The engines are by design cheaper to build and maintain – they don’t need to be as refined for one.

And yes, there are more parts in an ICE than an EV, however the vast majority of those things rarely actually break. Sure, they can go wrong, but they rarely do – and if they do they are rarely expensive to repair. Several others are snake oil (“tune ups” for example – maybe if you have a carbureted engine from the 1970s, but not relevant in modern fuel injected engines).

As mentioned before, the main reason econoboxes are scrapped is because they become unroadworthy due to safety issues – unrelated to the ICE drivetrain. These safety issues are just the same in EV’s. The idea that a BEV is (on average) going to last so much longer than an ICE is just wrong.

I’ve got a feeling that EV’s, due to their simpler components and longer life, will be on the road much longer.
So instead of “people on low incomes” purchasing tiny, cheap econoboxes, they’ll purchase a much nicer, much safer Model 3. After a few hundred thousand miles, even the short range version will still have plenty of battery capacity left for city driving.

Are there VW trolls on this forum? Any slightest criticism of VW means a lot of downvotes…

depending on the time of day you will get a mostly european or american view of the world. For a european a entry level car is something below 9k. You can’t make an EV at this price point. The VW guy is stating the obvious.

Actually, EVs are more expensive UP FRONT. So, when you buy comparables with EVs at similar price, you are actually paying much less. VW is correct that small EVs will be more expensive than gas. BUT, he is wrong in that he implies that will always be the case. Before 2025, small cars will have flipped to EVs and will be CHEAPER than today’s gas cars. Why? Battery costs/density. As I have said over and over (and probably way too much) that EVs will be majority of the new cars sold by end of 2022/3. The legacy car makers will not have switched to EVs, but NOBODY will want their ICE vehicles (save EMS, off-road, DoD, construction, farming, etc IOW specialized vehicles ). The normal small car buyers will NOT be buying the small cars. Instead, they will buy used 1-3 y.o MB, Audis, Lincoln, Lexus, etc for less than 10K. This is why the EVs will take off. These owners of more expensive ICE cars will be FURIOUS at the loss in value. Heck, they will lose their value faster than the worst in today’s time; BMW 3/5 series, Buick Envisions/Enclave, Cadillac SRX/CT-6 hybrids, VW Jetta/Passat, Chrysler 200, ford… Read more »

And as others have pointed out (way too much too), your feeling of 2022/2023 is a pipe dream, unless you’re considering the majority of EV’s being start stop hybrid vehicles, with PHEV’s and BEV’s making up around 5-10% max.

And no, the normal small car buyer will not be buying lightly used MB/Audis and other premium vehicles for the same reason they aren’t now. The cost of repairing and maintaining them is extremely high compared to a mainstream brand. You can buy a cheap, older BMW/Mercedes now, but they’re cheap for a reason – they’re moneypits. That’s not going to change, even when most cars are BEV’s. The cost or repairing them if they go wrong/are in an accident will be too high for most people looking at a mid level Honda/Ford.

This is the problem with Tesla. They are a premium manufacturer, and have premium maintenance/repair prices. If they want to be a mainstream manufacturer they need to reduce those costs to a more mainstream level.

I am sure the Koreans will fill the void. The Chinese EV makers are a possibility, but they seem to be too occupied with local production to try for US certification, and I suppose the tariffs don’t help that score either.

A used Leaf or other < 100 mile range car is still a bargain, and the old saw about range still applies, namely you don't really need more than about 50 miles of range for a commute if you have home and/or work chargers.

Are EVs for the rich? The state of California sure is attempting to make it that way. To have a commuter lane sticker and the $10000 combined subsidy, basically you have to buy a new EV, which most cannot afford. This is amusing to me since the funds for that come from car registrations, which everyone pays, including the poor. This means, again, SOC is taxing poor people to fund rich people's purchases. Way to go Gavin Nuesom.

Leading-edge efficiency is expensive. In a little under a year, starting Jan. 1 2020, all new homes built in California will have to be “net zero energy”, using expensive “cool roof” roofing materials, super-insulated attics and walls, high-performance low-e windows, state-of-the-art efficient HVAC, condensing gas tankless or electric heat pump water heaters, and PV solar panels – probably at least 3-4 kW – to match the homes’ estimated net yearly energy demand. The additional cost to build NZE homes with PV will push new home prices well beyond what would be considered “affordable” for lower income communities. Even new multi-family apartments – normally built for the lower-income family – will have such mandates.

Low-income people drive older cars and live in older homes and apartments. They are cheaper to acquire, but more expensive to operate, not as reliable, and not as safe or comfortable as those who can afford “new”. That is as it always has been, is, and always will be.

VW should really shut up these old men, they are not very helpful for their vision and strategy. Factually he is not so off, but there are many ways to tackle some of the issues he raises in the original interview and if VW wants to be relevant they have to (e.g. car sharing, used ownership, short range cars with option to rent for long trips, etc) . by the way, the article summary is quite poor, the main quote about a EV being always more expensive than an ICE is actually mistranslated

“Small, Entry-Level Electric Cars Won’t Be Affordable, Says VW”


As the volumes of EV’s will increase, the cost of batteries will come down.

In all car segments.