Volkswagen Hits Brakes on Electric Sedan Launch in North America

58

Volkswagen Delays ID.7 Electric Sedan Launch in North America Citing Market Shifts

Electric Vehicle Sales Growth Slows, Sedans Fall Out of Favor

Just a year after its flashy NYC debut, Volkswagen is delaying the launch of its ID.7 electric sedan in the United States and Canada. The German automaker cites “changing market dynamics” as the reason for the setback.

This decision comes amidst a slowdown in electric vehicle (EV) sales growth. Kelley Blue Book (KBB) reported a mere 2.6% year-over-year increase in EV sales for the first quarter of 2024, a significant drop compared to the 15.2% growth witnessed in the previous quarter and a staggering decline from the 46.4% surge observed in the first quarter of 2023.

Furthermore, the traditional sedan body style has been steadily losing popularity in the American market for years. This trend was recently exemplified by Chevrolet’s decision to discontinue the Malibu sedan after five decades of production and over 10 million units sold, opting to prioritize SUVs, crossovers, and EVs instead.

A year ago, Volkswagen Americas expressed optimism about the ID.7’s prospects in the US. However, the company’s current approach reflects a broader strategic shift.

While Volkswagen maintains its goal of introducing 25 electric vehicle models in North America by 2030, its parent company is scaling back its initial ambition of launching 75 EVs globally over the next decade.

Additionally, Volkswagen Passenger Cars CEO Thomas Schäfer recently acknowledged the need to adjust the product portfolio in response to changing consumer preferences.  Schäfer highlighted a growing demand for plug-in hybrids, particularly in China and the US. While Volkswagen offers plug-in hybrid versions of the Passat sedan and Tiguan SUV in Europe, these options are currently unavailable in the American market.

To accelerate EV development and reduce costs, Volkswagen is also forging key partnerships. Notably, the company announced a collaboration with Chinese EV maker XPeng to produce two new Volkswagen-branded EVs powered by XPeng’s software and engineering expertise.

The ID.7 launch delay underscores the dynamic nature of the auto industry. Volkswagen’s strategic shift reflects the need to adapt to evolving consumer preferences and market conditions. The company is focusing on plug-in hybrids to address growing consumer demand and is leveraging partnerships to streamline its EV production efforts.