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Volkswagen Would Be Giving More EVs to Dealers Who Sell More ICE Cars

When we told you that the ID. BUZZ deliveries will only begin in September in Europe, we wondered if that had to do with the supply chain crisis. Automobilwoche confirmed that with surprising news: Volkswagen would have established a quota system for EVs based on how many ICE vehicles dealers are able to deliver.
Volkswagen ID.4 8 photos
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The idea with the quota system is that demand will not decide who gets electric cars, such as the ID.3 or ID.4. Instead, the criteria for establishing that will be turnover: dealers that sell more cars are the ones who can also sell more EVs.

Volkswagen sent its German dealers a letter explaining the system, and Automobilwoche managed to see it. According to the letter, dealers with an annual target of selling 999 vehicles may order 15 ID.3s and 25 ID.4s, representing only 4% of total sales.

Although it may seem that the idea is to level the game, it also looks incredibly incoherent. If the idea with EVs is to curb fleet emissions, selling more ICE cars will increase it. According to Automobilwoche, German customers are waiting around one year to get their ID.3s. Volkswagen’s official estimate for the wait is “more than nine months,” and that affects other MEB products as well. The Audi Q4 e-tron would only allow new reservations for mid-2023.

The core issue relates to not having enough electric cars to sell. However, the quota strategy makes us wonder if that would be any different if Volkswagen could produce enough EVs to meet the demand for them. If it ruled production volumes for electric cars and combustion-engined vehicles, we would probably see the former naturally overtake the latter.

The problem is that electric cars need more than superconductors. They also need an ever-increasing number of battery packs. The scarcity of raw materials for cells is leading to continuous price rises. If Volkswagen is to sell these EVs at a profit, it will have to sell them for more money, which could curb demand. At the same time, it has to sell EVs to meet emission regulations, so they have to remain affordable.

By imposing the quota system, Volkswagen is trying to ensure steady sales volumes despite the rising demand for electric vehicles. If the company cannot produce enough of them, it still has to sell the other cars it manufactures. Imposing quotas may help it sail the current supply crisis. However, it may also hurt the company’s EVs: customers willing to buy one will probably search for them with other carmakers.

 
 
 
 
 

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