FRANKFURT, Germany – Volkswagen is rolling out what it bills as the breakthrough electric car for the masses, the leading edge of a wave of new battery-powered vehicles about to hit the European auto market.
The cars are the result of big investments in battery technology and new factories driven by environmental regulation and concerns about global warming.
But it's not at all clear whether consumers are ready to buy them. Electric cars remain a niche product, with less than 2% of the market, due to higher prices and worries about a lack of places to charge. It adds up to a risky undertaking for the companies.
Volkswagen is betting that the ID.3, with a roomy interior, brisk acceleration and battery range of up to 340 miles for the top model, will change things. It argues that the base price under $33,000 makes the ID.3 “an electric car for everyone.” A key competitor, Tesla's Model 3, starts at $40,000 in Europe, but the company's website indicates it can run to well over 40,000 euros, depending on options.
The ID.3 went on display Monday ahead of the Frankfurt Motor Show, and Volkswagen is also revealing a new logo.
Both moves are aimed at underlining the company's transformation since its 2015 diesel scandal, in which Volkswagen was caught using software to cheat on emissions testing and paid more than 3$33 billion in fines and penalties. The company is positioning itself as younger and more oriented toward digital services and zero local emissions electric driving.
Volkswagen CEO Herbert Diess said that the launch is “a decisive moment” for the company and that the ID.3 will “bring the electric car from its niche into the middle of society.”
The company touts the ID.3 as the third chapter in the company's history, following the Beetle, which became a symbol of postwar German prosperity, and the Golf, of which Volkswagen has sold more than 35 million since 1974.
The car will reach customers in Europe next year, while Volkswagen plans to launch an electric SUV in the United States at an as-yet unspecified date.
The German company is deploying extensive financial and manufacturing capabilities to make a success of its electric cars, saying it will have invested 30 billion euros in this area by 2023. It has sunk 1.2 billion euros into a factory in Zwickau in eastern Germany to make the ID.3, the first of eight planned electric-car plants worldwide, including one in Chattanooga, Tennessee.
The company, which sold 10.8 million vehicles last year, aims for 40% of its sales to be electrics by 2030.
Analysts warn that the industry could be saddled with slow-selling products that undermine earnings in a weakening global car market. Electrics were only 1.8% of the European market through the first six months of the year.
The launch of electric cars is so far mainly driven by regulation, not consumers.
Above all, companies are rushing to make electric cars to meet tighter rules on carbon emissions and pollutants, particularly in the European Union and China.