The biggest letdown of Tesla’s Investor Day this month occurred around 40 minutes into the nearly four-hour-long presentation, when executives buried all hope of a new entry-model electric car. Since September 2020, Elon Musk has been promoting plans for a $25,000 car, but no one has seen even a computer-generated image or stylized pencil sketch, let alone a real-life design study.
Volkswagen stepped in to steal Musk’s thunder two weeks after Tesla failed to conjure a rabbit out of its hat. The Volkswagen brand debuted the ID2 hatchback on Wednesday. While it is still a study, it provides a very real glimpse at a production-version electric car for the masses that should cost less than €25,000 ($26,500), travel 450 kilometers (280 miles) on a single charge, and be as roomy as a compact when it hits the market—which is currently scheduled for the end of 2025.
To enhance affordability and appeal, Volkswagen converted its EV architecture to front-wheel drive, installed a 226-horsepower electric engine inside, and outfitted it with a 490-liter (nearly 17-cubic-foot) trunk that can hold more than the considerably larger Tesla Model 3 even when its front trunk is included.
One typical criticism leveled against incumbent automakers’ EVs is that they sell the bare minimum required to meet regulation CO2 targets at a loss. VW says, however, that it will have a financial incentive to sell it in big quantities.
“We cannot have margins that are below 6%,” VW brand CEO Thomas Schäfer told reporters in Hamburg on Wednesday evening, confirming the ID2 “definitely can” hit that mark.
Reasons why I do not take the ID.2all seriously
#1 VW never delivers the concepts they presented
#2 It's the outdated MEB tech & software full of issues
#3 In 2025 Tesla has delivered its next gen for a full year
#4 VW plans 4% margin this year & a 25k model = negative margin
#5… https://t.co/jGOuNZQ5Wa— Alex (@alex_avoigt) March 16, 2023
After the divisive ID Life concept car from September 2021, this is VW’s second attempt to imagine a tiny and affordable zero-emission hatchback.
Musk, on the other hand, drew a blank on Investor Day on March 1, the last day Tesla’s shares traded above $200.
The so-called Osborne effect provided a justification for brand fans. They claim Musk didn’t want to share the design of his $25,000 automobile because prospective Tesla consumers would delay purchasing a Model 3 or Model Y. Instead, executives discussed how they planned to minimize costs for the car.