Volkswagen sets ID.4 up for Canadian market success as first all-wheel-drive electric SUV to be rebate-eligible
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Apr 15, 2021
Peter Vella

For some time Volkswagen has been claiming that they will be “People’s Car of Electric Vehicles”. Peter Vella dives into why last week’s announcement of Canadian pricing for the ID.4 supports that

The Volkswagen ID.4 in Canada

For some time Volkswagen has been claiming that they will be “People’s Car of Electric Vehicles.” Peter Vella dives into why last week’s announcement of Canadian pricing for the ID.4 supports that

I think the Volkswagen ID.4, which was just announced is coming to certain jurisdictions in Canada in 2021, is a game changer, not on the technical front so much as that of marketing. In addition to Canadian-condition conscious features (more on that later), the best bit of news may be that Canadians do not have to take an American car price and multiply it by the exchange rate.

VW has specified the ID.4 will start at $44,955 north of the 49th parallel — a welcome break from the sticker shock other vehicles cause. The amount makes the vehicle eligible for Canada’s federal EV rebate of $5,000 and keeps the car in play for all available provincial rebates currently being offered.

In both design and price, the Volkswagen is more of a “normal car” than some EVs and that characteristic alone could attract more first-time EV buyers.

Ambitious manufacturing plans

VW’s (not so secret) weapon is economy of scale. The Zwickau factory in Germany (where the ID.3 and ID.4 are assembled) is currently approaching its 1,500 cars per day production goal. There will soon be a similar facility in Chattanooga, Tenn., and a third in Anting (Shanghai), China. If you add that to other VW brands such as SEAT, Skoda, and Audi you may not be surprised to know that the Volkswagen Group is planning for 16 EV assembly sites and six battery manufacturing facilities worldwide. Does any of this help us here in Canada? Let’s kick some tires.

Admittedly comparing vehicles — EV or otherwise — is an apples-to-oranges scenario. Below, I’m going to give the total (Canadian MSRP) range of prices for each vehicle mentioned. You can decide whether a base or loaded model is your cup of tea. Unless something such as range is mentioned in the descriptions, the price variance within a model is mostly down to amenities and safety features.

Visit Volkswagen of America’s website and you will see that south of the border the ID. 4 starts at a price of US$40,000. On a straight currency exchange basis that would be $52,000 Cdn. However, on the VW Canada website we see that the same model starts at $45,000. It gets better. The Canadian version also comes equipped with a heat pump. This results in significantly less stored energy from the battery being used to heat the car’s interior. As a bonus for those travelling, the entire ID.4 line will get two years of free, fast charging with the Electrify Canada network. If there is a downside it is that all the available options are in one ($8,000) package, and like bundled television channels you have to get a glass roof to get LED headlights.

Hot market

The mid-size SUV is the fastest growing automotive sector in many parts of the world. A large percentage of Canadian buyers tick the All Wheel Drive (AWD) box, and the ID.4 can be optioned to send electricity to the front as well as the rear tires. But it is not the first EV with AWD.

We had the Audi e-Tron, Jaguar i-Pace and Tesla Model X to start, but for any of those you would be paying from $90,000 to $150,000. We also have the Tesla Model Y and Ford Mustang Mach-E. The Mach-E needs to be optioned to have AWD and a range similar to that of the ID.4. When that is done you will pay $70,000. The Tesla has advantages over the Volkswagen in range, performance, and its Supercharging system. Coming standard with AWD, the Model Y also lives in the $70,000 zone. Will the ID.4 be able to undercut the establishment in price while still offering up an AWD, EV of merit?

The answer for curious Canadian buyers may lie in choosing the ID.4 “Pro AWD” with dual motor AWD, 400 kilometres of range, and 301 horsepower. That model will start at $50,000. For this price you will get standard equipment focused on the Canadian market such as heated front seats, heated steering wheel, heated windshield as well as the aforementioned heat pump. Now for the biggest news. Because of the surprising price of $49,995, the AWD version also qualifies for the $5,000 federal rebate. It is the first and only AWD EV to do so.

Is the ID.4 on par with the performance of the Model Y? An emphatic, “No.”

Is it an electric SUV with AWD for $20,000 less than the “Model Y”? An emphatic, “Yes.”

Finding the right comparables

Volkswagen is not actually concerned with these types of comparison though. They are bold enough to want to compete with the heavyweights of the mid-size internal combustion SUV scene. It should be noted that due to new design paradigms (inherent with EV platforms), the interior space of the ID.4 is substantially larger than most mid-sized SUVs. An example is VW’s own Tiguan ($30,000-$40,000) and the “4” may be better compared with larger SUVs commanding a higher price. For our purposes, though, we are staying within the segment. Obviously there are factors other than price (like operating costs) to consider, but for now, let’s have an MSRP scrimmage only.

The real marketing targets in Canada for VW then would be the Honda CRV and Toyota RAV4, which cover a purchase range of $30,000 to $45,000 in their (solely) internal combustion AWD iterations. The top end is surprisingly close to our $50,000 target, but at mid-range pricing the difference is still substantial.

Within the Toyota RAV4 line there are models that have taken on the challenge of improving AWD SUV’s fuel economy and lowering its effect on the environment. These might be worth comparing to the ID.4, too, as they would have lower operating costs compared to their ICE siblings. The RAV4 Hybrid AWD went a long way to clean up the image of the SUV and give many drivers their first experience of some form of electric mobility.

The mild hybrid RAV4 AWD is priced between $35,000 and $44,000. As a plug-in hybrid (or PHEV), the RAV4 Prime offers 65 kilometres of all-electric travel before reverting to mild hybrid status. It sells for between $45,000 and $52,000. The Mitsubishi Outlander PHEV has very similar pricing and specs to the Prime. Both PHEVs mentioned employ a second electric motor on the rear axle to add AWD capability. Alas, these vehicles still have the maintenance requirements of most modern internal combustion engines.

With the competitive pricing of the ID.4 Pro AWD, the best hybrid technology is now in a range that is only $5,000 to $6,000 less expensive. The price differential between competitive SUVs that are solely powered by an internal combustion engine and a pure electric vehicle is getting smaller. By including cost of operation into this equation a high-mileage driver might want to think twice before their next vehicle.

VW has thrown down the gauntlet to manufacturers that are about to introduce new electric vehicles. Hyundai (IONIQ 5), Kia (EV6) and Nissan (Ariya) will need to sharpen their pencils. More affordability means more clean cars on Canadian roads; and now, off roads as well.

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