VW's Tesla attack gets real as electric-car deposits open

A Model S electric car of US car maker Tesla leaves a Tesla service centre in Oslo, Norway. In the first half of 2018, Tesla has become the fourth company with the highest number of complaints to the Norwegian Consumer Council. (Pierre-Henry Deshayes, AFP)
A Model S electric car of US car maker Tesla leaves a Tesla service centre in Oslo, Norway. In the first half of 2018, Tesla has become the fourth company with the highest number of complaints to the Norwegian Consumer Council. (Pierre-Henry Deshayes, AFP)

Volkswagen is about to find out whether consumers will back its 30 billion-euro ($34 billion) strategy to topple Tesla as the electric-car leader.

The German auto giant is now taking 1 000-euro deposits to secure one of the first in a new range of battery-powered models. The new ID.3 hatchback - which VW hopes will be the electric-car successor to the iconic Beetle - will start at less than 30 000 euros, roughly the same level as the diesel variant of its best-selling Golf hatchback.

“After the Beetle and the Golf, the ID.3 starts the third major strategic chapter in the history of our brand,” VW sales chief Juergen Stackmann said in a statement. “We have a lot in the pipeline.”

The ID.3 anchors the rollout of more than 20 battery-powered models in coming years with a goal to selling more than 1 million electric cars annually by 2025. The ambitious effort is set to stoke competition in a segment where automakers struggle to generate returns and is mainly driven by tighter pollution regulations.

While some consumers have shown interest in the vehicles - which generally cost more but have less range than combustion cars -- electric cars haven’t broken through on the mass market.

To drum up interest, VW is offering a special edition of the ID.3 that’s limited to 30 000 vehicles and includes a year’s free charging at stations connected to the company’s WeCharge app. Reservations are open for consumers in 29 countries across Europe, with Germany, Norway and the Netherlands expected to be among the top markets, according to VW.

The variant will cost less than 40 000 euros and includes a battery capable of powering the car for 420 kilometers (260 miles). The basic version has a range of 330 kilometers, while the top-of-the-line model can drive as far as 550 kilometers on a charge.

In a sign of its growing marketing rivalry, Tesla sent an email to prospective German customers on Wednesday, trumpeting its Model S and Model X as having the best range of electric cars in series production. Volkswagen is slated to start mass assembly of the ID.3 late this year, with the first deliveries in mid-2020. Overall, VW is aiming to sell 100 000 ID.3 vehicles annually.

Tesla raised $2.35 billion last week to pad its coffers amid struggles to generate profits sustainably. The California-based carmaker’s push into Europe and China puts it in direct competition with VW and its upscale sister brands Audi and Porsche, which are also ramping up electric-car plans.

ZAR/USD
16.74
(+0.34)
ZAR/GBP
21.11
(+0.49)
ZAR/EUR
18.98
(+0.13)
ZAR/AUD
11.68
(-0.05)
ZAR/JPY
0.16
(+0.50)
Gold
1808.48
(+0.48)
Silver
19.15
(+2.10)
Platinum
845.00
(+2.60)
Brent Crude
43.03
(0.00)
Palladium
1979.00
(+1.43)
All Share
56084.69
(+1.20)
Top 40
51770.32
(+1.20)
Financial 15
10630.48
(+1.51)
Industrial 25
76510.24
(+0.49)
Resource 10
53543.45
(+2.02)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1985 votes
I am taking a hit, but should be able to recover in the next year
23% - 2594 votes
My finances have been devastated
34% - 3868 votes
It's still too early to know what the full effect will be
25% - 2774 votes
Vote