VW's Pablo Di Si: Price gouging ID Buzz buyers would be big mistake

HUNTINGTON BEACH, Calif. — As Volkswagen plans to launch the ID Buzz electric bus tailored specifically for North America in the third quarter next year, regional CEO Pablo Di Si is making one thing clear: He does not want dealers gouging customers.

Discussions with Volkswagen dealers on the three-row ID Buzz's retail plan — including how customer orders will be handled if demand proves overwhelming — are ongoing, Di Si said last week during a media roundtable here to discuss the launch strategy.

"We need to find a fair way ... for the consumer and the dealer — there's no overpricing, that the system doesn't crash," he said. "We have, I would say, another three to five months to figure it out. We don't have the solution yet."

Anecdotal reports on social media and web message boards complained that some dealers were tacking on "market adjustment fees" that added thousands of dollars to the sticker price of the VW ID4 electric crossover, which starts at $40,290 including shipping and excluding federal and local tax incentives.

VW has yet to reveal the price of the North American ID Buzz, which will have one more row than its European counterpart, a nearly 10-inch longer wheelbase and more premium equipment. In Germany, the two-row ID Buzz starts at €54,270 ($58,420) excluding the local value-added tax. The ID Buzz Cargo starts under $51,000 before the VAT.

Di Si said he wants the dealers to make money on it, "but we cannot penalize the consumers." Even a premium-priced launch edition is out of the question. "I don't think people should pay more," he said.

"We cannot make a mistake [with] this vehicle. With respect to the customer ... let's discuss it. We have a good relationship with the [dealer] network," he said. "We cannot have markups."

Di Si declined to say what the ID Buzz's first-year volume target for North America is, but the plant in Hanover, Germany, that produces the vehicle has an annual capacity of 100,000. Reuters, citing an unidentified source, has reported that VW is considering building the ID Buzz in Chattanooga, where the ID4 is assembled.

The ID4 is the sole EV from a foreign automaker that qualifies for the full $7,500 in tax credits for vehicle purchases provided by the Inflation Reduction Act.

While the ID Buzz does not qualify for the federal purchase credit because it isn't assembled in North America, Di Si sees opportunity in leasing, which has dropped industrywide amid tight inventory. The commercial clean vehicle credit, also part of the Inflation Reduction Act, allows automakers to pass on a $7,500 credit to customers who opt to lease instead of purchase. And that credit has none of the assembly location, battery component and customer income restrictions of the federal purchase credits.

Asked whether the lease credit could raise penetration, Di Si said, "I hope so." He also said he anticipates interest rates will decrease this year and early next year. Between the $7,500 lease incentive and dropping interest rates, he said, "It's going to be huge."

While the two-row ID Buzz is not destined for North America, the three-row is Europe-bound, Kai Grünitz, Volkswagen Group's head of technical development, said during the roundtable.

This long-wheelbase "version of the ID Buzz will be also in Europe," he said. While the three-row was developed for North America, "there's also a huge demand ... in Europe, so we will bring it into Europe a few weeks after starting for North America."