Elon Musk has teased the idea of an affordable electric car, but VW ID.2ALL, due in 2026, will cost $26,000 onwards and offer 270 miles range
It looks like Elon Musk is getting a bit late with releasing the super-affordable electric car he has been dropping hints of for all the years. While details of the low-cost Tesla are as good as non-existent, competition, Volkswagen in this case, has sped past and announced its highly competitively priced EV. Unveiled as the VW ID.2ALL, the new compact city car will launch in 2026 and cost little more than $26,000. This means it will have the sub-$30,000 Chevrolet Bolt in its crosshairs while even competing with the upcoming Chevrolet Equinox Electric that will launch this year. Even Fisker Inc will introduce a sub-$30,000 offering in the form of the Pear mini-crossover priced at $29,300 onwards.
VW ID.2ALL Undercuts Tesla Model 3 By Huge Margin
In comparison, the Model 3, the most affordable Tesla EV, retails at $43,000 + taxes. This, even after the sticker price was recently trimmed down by a few thousand dollars. While the upmarket image of the Tesla could ensure the ID.2ALL and other low-cost runabouts don’t have a direct impact, it would still mean the Texas-based carmaker losing some of its market share. Speaking on this, Ed Kim, President, AutoPacific, told Forbes: “We’re now at that tipping point where we’ve got EVs at about 6% market share, and more and more mainstream consumers are starting to think about an EV as their next purchase. But the median transaction price of an EV is well over the $50,000 range. It’s out of reach for the mainstream consumer. … Automakers have to introduce more mainstream models that middle-class people can afford. Up to now, there hasn’t been a whole lot of choice.”
By 2022, Tesla had already sold over 1.3 million electric cars worldwide. With an average price of over $65,000, these models lock horns with premium offerings from brands such Mercedes, BMW and Audi. Meanwhile, the Biden Administration aims to achieve 50% sales split between ICE and electric cars by 2030. Of course, the low cost offerings would play a vital role towards the achievement of this goal. Details on the USA launch timeline are unavailable as of now. In the official announcement, Thomas Schäfer, CEO, Volkswagen passenger car business, said: “The ID.2ALL shows where we want to take the brand. We are implementing the transformation at pace to bring electric mobility to the masses.”
A USD 25,000 Tesla Could Become a Disruptive Force in the Market
While details on the affordable option from Tesla Inc continue to remain sketchy, Musk recently revealed at the March 1 investor conference that his company plans to reduce the manufacturing costs of its cars by up to 50%. To achieve this, the carmaker would use efficient production processes, updated designs and new materials to make up for the expensive batteries. Musk even hinted at an all-new Tesla model, which is already in development, benefitting from these new processes. While prices, range and other details are unavailable, what’s confirmed is that this car would be made at the new facility off Monterrey, Mexico. The affordable electric car has been making news since it was first announced as a part of Musk’s ‘Master Plan’ announced in August 2006.
Kim opines that launching a rival of the affordable models from GM, VW and Fisker could make terrific sense. He says: “The Tesla brand remains so aspirational that I think when they do enter that space there are going to be a lot of entry-level customers who will say, ‘Oh my god, I’ve dreamed of owning a Tesla for years and now I can have one for 25-grand. Holy crap!’”
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