FYI: Volkswagen shifts focus, prioritizes hybrid powertrains and a potential electric pickup for the U.S. market amidst a declining demand for small EVs.
Volkswagen’s Strategy Shift in the U.S. Market
Volkswagen’s journey in expanding its electric vehicle (EV) lineup has taken an interesting turn in the U.S. The company is opting out of bringing its smaller, affordable EVs, the ID.1 and ID.2, to North American shores. While these models are being fine-tuned for European markets, their absence here points to a strategic refocus by the German auto giant.
Why Small EVs Are Off the Table
During a round table at the New York Auto Show, Kjell Gruner, Volkswagen’s CEO for North America, explained the decision. Gruner attributed the exclusion to the models’ lack of speed and the added cost from importing via Europe, making them niche and financially non-viable for American consumers. Also, given the slimmer profit margins of smaller vehicles, coupled with the historical backdrop of tariffs on imported goods, the decision remains economically sound.
A Pivot Towards SUVs and Trucks
Volkswagen’s lineup in the U.S. has steadily leaned toward SUVs and crossovers, alongside staple passenger cars like the Jetta and the GTI. The move away from smaller EVs reflects this trend and is highlighted by the company’s decision to forego introducing the ID.3 and ID.7 in the States. The demand landscape has led Volkswagen to explore other avenues in electrification, notably a midsize electric pickup truck that aligns with its SUV-heavy strategy.
Hybrid Advancements and Pickup Prospects
In complement to its EV plans, Volkswagen aims to enhance its U.S. offerings with hybrid powertrains. Although Kjell Gruner kept specifics under wraps, it’s anticipated that bestsellers, such as the Tiguan, Atlas, and Taos, might receive these upgrades in response to growing demands for fuel efficiency.
Volkswagen is not closing its doors entirely on new EV introductions—it eyes a potential space in the electric truck segment. The concept of a midsize unibody electric truck, linked to models like the Atlas, is under consideration, reminiscent of the previously showcased Tanoak concept. This prospective vehicle would strategically fill a gap below the more robust VW-backed Scout Terra, anticipated to come with both full electric and extended-range versions.
The Larger EV Landscape
The absence of Volkswagen’s smaller EVs in America doesn’t spell a dearth of affordable electric options altogether. The market anticipates alternatives such as the cost-effective Chevrolet Bolt and an even more affordable variant from Tesla. Rivian’s R3 promises a competitive entry by 2027, and Jeep’s Renegade is also set to make its electric debut, promising substantial range.
Conclusion
Volkswagen’s current direction in the United States, focusing more on hybrid and electric trucks rather than small EVs, reflects broader trends and specific market demands. Amidst this varying landscape, consumers can look forward to innovative alternatives from other automakers. For more insights and updates, reach out to us at tips@automotive.fyi, or on Twitter @automotivefyi.
Authored by William Kouch, Editor at Automotive.fyi
