Volkswagen will use a centralized online reservation system in North America next month as it reveals the ID4 battery-electric subcompact crossover and will accept initial $100 refundable deposits from consumers to hold their place in line.
However, the actual sales price will still be set by the local dealer and could potentially differ from the as-yet-undisclosed sticker price. Meanwhile, Volkswagen of America is still negotiating with its German parent company, Volkswagen Group, over exactly how many ID4s will be allocated for sale in North America as the Tiguan-sized crossover begins its first few weeks of production this month in Zwickau, Germany.
The ID4 is due to begin arriving in U.S. dealerships at the very end of this year. Initially, distribution will be concentrated in states such as California that have a zero-emission-vehicle mandate but should be expanded across the country in the first half of 2021, explained Duncan Movassaghi, executive vice president of sales and marketing for Volkswagen of America. He said that fully 99 percent of the brand's 650 dealers in the U.S. have now signed up to sell the ID4 and subsequent battery-electric vehicles from the automaker. Those dealerships are undergoing individual reviews right now to prepare them to sell electric vehicles, with Volkswagen subsidizing up to 85 percent of the costs of the needed dealership infrastructure.
Based on Volkswagen's modular battery-electric MEB platform, the ID4 compact crossover is the second model in a series being produced by the company in Zwickau. It follows the ID3, a Golf-sized subcompact hatchback that went on sale in Europe this year after a delay caused by software issues. The smaller ID3 is not expected to be exported to North America. U.S. production of the ID4 is slated to begin in 2022 in Volkswagen's plant in Chattanooga.
Movassaghi said that consumers will be able to place initial deposits online either from their homes or at a local VW dealership and will later be asked to go into the dealership and deposit an additional $400 to confirm their order and lock in their configuration. Both deposits will be fully refundable until the car is delivered. Once they sign up, consumers will be able to see their place in line and get updates through the build and delivery process for their individual vehicle. Incentives, including the $7,500 federal credit, will be automatically configured into the online pricing by ZIP code.
The reservation system is similar to the one that Audi initially used when it launched the e-tron compact crossover in the U.S. in 2018, except that the Audi deposits were $1,000. While many automakers have turned to taking reservations for new models — including Ford's recent hit with the Bronco — this is Volkswagen's first time doing so. Such reservations are "a vote of confidence in our new products from our customers and gives us a sneak peek into purchase intention before the car even hits our showroom," said Dustin Krause, the director of e-mobility with Volkswagen of America.
"We see operations such as Carvana offering a fully online customer-led model, and we see huge potential for this," Krause said. "We know that we are sort of at the crossroads of this new retail model, and certainly the impacts of COVID-19 have highlighted that even more. We have some customers, obviously, who still prefer the more traditional [dealership] experience, but we also see a fast-growing population of customers who want to go online, find their color and purchase it with very little intervention."
The ID4 is expected to be revealed globally Sept. 23, though shots of the vehicle leaked this year from China. The ID4 is expected to launch with an estimated range in excess of 300 miles, according to other Volkswagen executives.