SHANGHAI -- Volkswagen's ID family - the backbone of its electric-vehicle ambitions - is off to what even company sources call a worryingly slow start in China.
Sales of two ID4 electric SUVs, the ID4 X and ID4 Crozz, were just 1,213 combined in May. And that was about 200 fewer than in April, according to auto consultancy LMC.
The sales fall far short of VW's initial hopes, four people with knowledge of the matter said, and below what some other automakers have achieved with early sales of flagship EV offerings in the world's largest auto market.
VW's venture with state-owned SAIC Motor, which makes the slightly bigger ID4 X model, had been targeting sales of 50,000-60,000 vehicles this year, according to comments by Yang Siyao, a company marketing executive, in Chinese media in March.
A separate venture between VW and FAW which makes the ID4 Crozz had similar targets, one of the sources said.
Those goals now seem unrealistic.
Furthermore, both ventures' EV plants are running below 10 percent of production capacity, according to three of the people.
The sources blamed the less than auspicious debut on a lack of smart tech features, fierce competition, a late launch compared to Tesla and Chinese EV makers as well as hiccups with its new EV sales network.
"Sales so far are behind our earlier expectations. We've had to dial down production plans for the ID4 again and again," said one person, who like the other sources was not authorized to speak to media and declined to be identified.
"This is not healthy, but at the moment customers are not coming to buy them."
In another sign of sales stress, SAIC-Volkswagen has suggested staff members buy ID4s, according to an internal memo seen by Reuters.
By comparison, Tesla sold 6,612 of its Model Y in China in the first two months after its launch. The ID4's sales performance in China also contrasts sharply with Europe, where it is a top-selling electric car with 12,101 sold in the first two months post-launch, according to JATO Dynamics.
VW said in a statement to Reuters that ID4 China sales were in line with expectations as it builds up production and a new sales network, adding it does not view Tesla's Model Y as a direct competitor for the ID4, which occupies a different vehicle type segment.
It also said it was confident the two ID4 models would see sales growth and noted plans for three more ID models to be launched this year in China.
More than any other country, China has aggressively pushed for the adoption of EVs, introducing sales quotas as it seeks to cut pollution, encourage the growth of its auto industry and reduce reliance on oil.
VW, the country's biggest foreign automaker with 3.85 million vehicles - mostly gasoline - sold last year, has more riding on successfully transitioning its customers to EVs than the average automaker. It has also declared its intention to surpass Tesla as the world's top EV maker by 2025, ensuring that China will become a crucial battleground.