Volkswagen ID.3 Costs 40 Percent Less Than Volkswagen e-Golf To Build Company Says

As Volkswagen was rolling out yet another I.D. concept at this year’s Los Angeles Auto Show, the company’s CEO gave a bit more information on the first production model to wear Volkswagen’s EV lineup badge, the ID.3.

Speaking with Reuters, Volkswagen CEO Herbert Diess explained the cost savings associated with using a electric vehicle platform, having production facilities dedicated to building electric vehicles, and building an EV from the very beginning as opposed to converting a traditional vehicle into an electric one.

“If you focus on an electric platform, all in all it accounts for a 40% reduction against the predecessor electric Golf,” Diess said. “Most of it from cells and the battery system. Around 5-10% comes from dedicating an entire plant to electric vehicles.”

Introduced back in September at the Frankfurt Motor Show, the Volkswagen ID.3 is the first production car built on Volkswagen’s new MEB platform designed solely for electrified vehicles. It will be used not only to develop futur EVs at Volkswagen, but also for Audi, Skoda, SEAT, and the rest of the Volkswagen brand portfolio.

This gives Volkswagen the economy of scales needed to reduce production costs on the ID.3. The German automaker’s revised and ambitious electrification strategy announced last March aims to introduce 70 new electric models by 2028 and to reduce CO2 emissions by 30 percent in 2025 compared to 2015 levels.

This will entail dedicating complete production facilities to electrified vehicles which, again, create economies of scale for new EVs like the ID.3.

The Volkswagen ID.3 will debut next year in Europe. There are no plans to bring it to the United States just yet, but Volkswagen is considering the ID.3 for Canada. That said, if Volkswagen wishes to reach its electrification targets, one would think they would need the U.S. market at some point. If the cost of producing the ID.3 is lower as VW says, we shouldn’t rule out an eventual new EV for the United States market.