Volkswagen Beats Elon Musk’s Tesla in Revealing $25,000 Car for the Masses

 

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.

 

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.

 

 

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