VW outlines launch plans for first member of new EV family

The Volkswagen brand is getting ready to launch what may eventually become the industry's top-selling family of electric vehicles. The first model will be the ID3, a hatchback similar in size to the Golf. VW brand's sales and marketing director, Juergen Stackmann, spoke about the demand he expects for the car with Automotive News Europe Correspondent Christiaan Hetzner.

When can customers start purchasing the car?

We will start our pre-booking for the ID on May 8. Deliveries will begin in summer 2020. We will start with a Launch Edition version that comes with a package of features we believe will see the highest demand. I think there is a good chance the Launch Edition will be fully booked before the car is actually shown to the public at the Frankfurt auto show in September. The actual sales process for these pre-bookers is scheduled to start after the auto show and will be carried out by our dealers.

Why did you decide to start with just one variant?

When you have a new model underpinned by a new platform and built on a new assembly line, you have to focus on one configuration initially. Otherwise the complexity is too great and neither the factory nor its suppliers can handle the ramp up. In that sense it is not unlike a combustion engine car. You would not go straight to market with all powertrain options either.

Will you take a similar approach as Tesla, first manufacturing the most expensive versions and then eventually working your way down?

We won't start with low-spec cars, since that is not typically what our customers order. Only a very small number of people buy the Golf in its base version. But we also won't wait a couple of years before bringing the entry model. The ID is meant to be affordable.

Are you concerned there might be a shortage of cars because ID production capacity will only reach 100,000 next year at the Zwickau, Germany, factory, which won't finish retooling its other assembly line until sometime in 2021?

I expect to sell every car we will be able to build. We invited our European dealers to Wolfsburg to see the car and they came away with volume requests greater than our estimates when we first started the project, which is great. Please remember, though, these come from our retail partners -- we have no hard data on actual customer demand at this point.

Will sales of the new-generation Golf will be cannibalized by your new EV?

We expect the ID to help us conquest new customers for the brand but a market leader such as VW will always have substitution effects. Those are calculated in advance of the project and our estimates of customers's migration -- for example from a Polo to a T-Cross -- tend to be pretty accurate in the end.

How important will it be to the ID's residual value to have updateable features?

This will keep the vehicle fresh, so there will be a positive contribution. We first have to gain some experience with updateable vehicles before we can really quantify that, however, so for the moment we are being very conservative in our forecasts.

Does that mean you won't assume particularly high residuals so you can aggressively price leasing contracts?

Our goal is to ensure the vehicle is affordable without incentives. But we need to change consumer perceptions on price. Roughly 40 percent of our customers in Europe are corporate in the broader sense. They focus on the total cost of ownership, not just the initial price but the resale value, insurance costs, maintenance and fueling. We need to introduce this concept among our private customers, since we are certain this shows the ID is just as affordable as an equivalent Golf.

VW managers estimate that roughly 10,000 units of the electric Buggy concept, shown at the Geneva show in March, would need to be sold annually for at least four years at a price of more than 40,000 euros for a production version to be viable. Does that sound realistic?

We have a firm intention to do a project where we could decide on these kinds of metrics. But we won't make a final decision until we have completed the feasibility study. Demand for such a car would be very exclusive as it would appeal most to customers who already have several cars at home and want something with an entirely different look. There is no rational argument for buying it. The sole purpose of this car is fun.

VW Group will launch 27 MEB-based cars by the end of 2022 across four brands. Seven EVs will be built in Europe and will carry a VW badge. If the Buggy shown in Geneva is not one of them, what else can we expect besides the hatchback, crossover, SUV coupe, microbus and sedan?

I know the media is interested but we will have to save that surprise for another day.

What is your unit sales forecast for the VW brand in 2018 after last year's record of 6.24 million?

We are optimistic, but it's much too early to say whether we will be able to top that this year. As a sales boss, you never like a volume drop, but we are focused primarily on improving our profit margins. I am confident that 2019 will again be a successful year for our brand.