The immovable object is now meeting the unstoppable force in China — Volkswagen’s new ID.4 EV has arrived ready to battle Tesla and its Model 3 for electric vehicle sales supremacy.
Actually, VW sent two versions of the new ID.4 crossover, although sent is a bit of an overstatement as the two vehicles will be built in China. The German automaker’s joint venture with FAW Group is producing the ID.4 Crozz while a venture with SAIC Motor manufactures the ID.4 X. The move is part of a $2 billion investment in electric vehicle production and sales in China the company revealed in May
Volkswagen has been hyping its global push of electric vehicles for some time now and the first wave of products are now beginning to land in various regions around the world. In China, the new vehicles represent the first set of vehicles that are comparable in terms of segment and pricing that Tesla has faced.
Tesla, which built a plant in Shanghai, had the top selling EV in the country, the Model 3, until recently when the Wuling Mini surpassed it. The Mini is the result of a partnership with General Motors; however, it’s really more of a mass market vehicle than either the Model 3 or new ID.4 with a price tag starting at just $4,200.
The Model 3 comes in at about $37,500 after government incentives. VW officials didn’t reveal the pricing of the two new ID.4 offerings at their recent introduction, according to Reuters, but did say it the price would be lower than the Model 3.
VW’s new EVs will have a range of more than 250 miles and are capable of receiving over-the-air updates like Tesla vehicles. While the new ID.4 models represent a serious challenge to Tesla’s domination of the market, they will not be the German automaker’s only products in China soon. Officials said there will be eight versions of the ID family of vehicles in the country within two years.
The German automaker announced plans earlier this year to invest $1.11 billion JAC Motors, a joint venture it holds with state-owned Anhui Jianghuai Automobile Group. The move increases its ownership stake from 50% to 75% in the EV maker.
Additionally, the company is putting $1.1 billion into battery maker, Guoxuan High-Tech Co. This gives VW a 26% share in the company, making it the Shenzhen-listed company’s largest shareholder. Both companies are in Hefei, a city 300 miles west of Shanghai. The investments also reveal how important they believe the market is.
It’s not just VW eyeing China, there is loads of competition, foreign and domestic. General Motors is priming for a big electric push in China, with 40% of its new vehicles sold in the country being electrified in some way as it attempts to grow its overall sales back to its peak number of 4 million from 2017. The company plans to have 20 electric vehicles for China by 2025.
Ford is also looking to grow its presence in China, launching 30 new or redesigned models in the country by the end of next year. The Michigan-based automaker said 15 of those will either be electrified variants of existing vehicles or new EVs. It introduced its first all-electric vehicle, the Territory, to the country last year. It also signed a deal with Chinese-owned BYD to provide batteries for all of its EVs it builds in the country.
Ultimately, Tesla has no plans to sit idly by and watch the advantage it’s carved out disappear. The company said it’s expanding the Shanghai plant and will produce the Model Y at the site next year. It’s also got plans for a sub $25,000 EV that would most certainly be a hit in China. However, that’s at least three years away, CEO Elon Musk said during the company’s annual meeting and Battery Day event last month.
Volvo, Mercedes-Benz, BMW and other automakers have all been strengthening ties to their Chinese partners with an eye toward growing their battery-electric sales in the months and years ahead.
China is pushing hard for more zero-emissions vehicles, which it calls new energy vehicles (NEVs), in the country. It just released its most recent forecast for NEV sales, predicting they will quadruple by 2025, accounting for 20% of all new vehicle purchases in the country. Looking further down the road, that number jumps to 50% by 2035, according to the country’s Ministry of Industry and Information Technology. Battery-electric vehicles are expected to comprise 95% of that number.