Why are the VW ID.x range so cheap?
Discussion
I see they have rejigged the prices again and they are only just above 30k now. VW always used to price a notch above the competition, e.g. a Polo was priced closer to an Astra than a Corsa. But with the ID range they seem to be undercutting even Hyundai and Kia.
Any idea what is going on?
Any idea what is going on?
Maybe they want to get more units out there so people can see them on the roads, maybe there’s a glut (unlikely given chip shortages etc), maybe they’ve decided to do more honest pricing and not offer huge discounts at retail, maybe looking to move to a fixed price online sales model… could be lots of reasons.
Because they have seen what companies like Hyundai are doing, and have quite sensibly come to the correct conclusion that if they don't compete, they are dead......
EV's being simpler and cheaper to develop and manufacture in high volumes, even by new start up car companies, are going to (and are) cause(ing) significant disruption in the passenger car markets.
As EVs become no longer unique or new, expect prices to tumble. The BOM for a BEV is currently targetted at around 75% of that of a comparable ICE when manufactured in similar volumes..........
EV's being simpler and cheaper to develop and manufacture in high volumes, even by new start up car companies, are going to (and are) cause(ing) significant disruption in the passenger car markets.
As EVs become no longer unique or new, expect prices to tumble. The BOM for a BEV is currently targetted at around 75% of that of a comparable ICE when manufactured in similar volumes..........
Max_Torque said:
The BOM for a BEV is currently targetted at around 75% of that of a comparable ICE when manufactured in similar volumes..........
I find that quite hard to believe for two reasons. Firstly, the equivalent EV weighs a large fraction more than an ICE and, secondly, the battery, which is a substantial proportion of the BOM cost, has never been manufactured at the rate necessary to have BEVs falling off the end of the production line at the same pace as ICEs. Someone is doing some serious extrapolation somewhere.AER said:
I find that quite hard to believe for two reasons. Firstly, the equivalent EV weighs a large fraction more than an ICE and, secondly, the battery, which is a substantial proportion of the BOM cost, has never been manufactured at the rate necessary to have BEVs falling off the end of the production line at the same pace as ICEs. Someone is doing some serious extrapolation somewhere.
Since when were cars priced by the pound?AER said:
Max_Torque said:
The BOM for a BEV is currently targetted at around 75% of that of a comparable ICE when manufactured in similar volumes..........
I find that quite hard to believe for two reasons. Firstly, the equivalent EV weighs a large fraction more than an ICE and, secondly, the battery, which is a substantial proportion of the BOM cost, has never been manufactured at the rate necessary to have BEVs falling off the end of the production line at the same pace as ICEs. Someone is doing some serious extrapolation somewhere.
stickleback123 said:
AER said:
Max_Torque said:
The BOM for a BEV is currently targetted at around 75% of that of a comparable ICE when manufactured in similar volumes..........
I find that quite hard to believe for two reasons. Firstly, the equivalent EV weighs a large fraction more than an ICE and, secondly, the battery, which is a substantial proportion of the BOM cost, has never been manufactured at the rate necessary to have BEVs falling off the end of the production line at the same pace as ICEs. Someone is doing some serious extrapolation somewhere.But,
The BOM i am talking about is the projected BOM for volume equivalent BEV production. Of course, that cannot take into account future effects that are unknown, but neither does the BOM of a current ICE vehicle. The big saving is by component and subsytem sharing, which accounts for most of the difference. For example, your 1.5 litre 3 cyl may well share parts with your 3.0l 6 cylinder, but even then, the process, logistics, stock keeping, manufacturing overheads, tooling, training, and assembly are going to be different. With a BEV, a big battery is just more cells than a small battery. They come of exactly the same process, leveraging economies of scale and maximising amortisation
And of course pure mass means nothing. Go buy a tonne of sand and a tonne of gold and report back!
The porjected BOM has fallen dramatically recently, principally for two reasons:
1) Cell costs have fallen as massive production capability comes on line
2) The OE's have taken long term interest in cell supply and have directly invested in, and secured, specific volume production for their own useage
Now that it is quite clear that the vast majority of passenger cars will transition to BEV within the next 5 or so years, this has resulted in much firmer cost and supply modelling as is obviously required for an industry that will have to make MILLIONS of BEVs really pretty soon!
Max_Torque said:
stickleback123 said:
AER said:
Max_Torque said:
The BOM for a BEV is currently targetted at around 75% of that of a comparable ICE when manufactured in similar volumes..........
I find that quite hard to believe for two reasons. Firstly, the equivalent EV weighs a large fraction more than an ICE and, secondly, the battery, which is a substantial proportion of the BOM cost, has never been manufactured at the rate necessary to have BEVs falling off the end of the production line at the same pace as ICEs. Someone is doing some serious extrapolation somewhere.But,
The BOM i am talking about is the projected BOM for volume equivalent BEV production. Of course, that cannot take into account future effects that are unknown, but neither does the BOM of a current ICE vehicle. The big saving is by component and subsytem sharing, which accounts for most of the difference. For example, your 1.5 litre 3 cyl may well share parts with your 3.0l 6 cylinder, but even then, the process, logistics, stock keeping, manufacturing overheads, tooling, training, and assembly are going to be different. With a BEV, a big battery is just more cells than a small battery. They come of exactly the same process, leveraging economies of scale and maximising amortisation
And of course pure mass means nothing. Go buy a tonne of sand and a tonne of gold and report back!
The porjected BOM has fallen dramatically recently, principally for two reasons:
1) Cell costs have fallen as massive production capability comes on line
2) The OE's have taken long term interest in cell supply and have directly invested in, and secured, specific volume production for their own useage
Now that it is quite clear that the vast majority of passenger cars will transition to BEV within the next 5 or so years, this has resulted in much firmer cost and supply modelling as is obviously required for an industry that will have to make MILLIONS of BEVs really pretty soon!
Smiljan said:
Erm - what's BOM? 
Bill Of Materials - all the stuff that goes up to make the final product, quantity, sub-assemblies, order of assembly (sometimes - don't know about automotive, but it would make sense), etc.So what Torque is saying is that the combination of item qty multiplied by value of a BEV's Bill of Materials is about 75% lower than an equivalent ICE (or it is projected to be for financial planning purposes).
The high cost of a single item (the battery) is more than offset by the much lower qty (and probably cost) of other components.
Smiljan said:
Monkeylegend said:
I am so glad you asked that.
I did know of course, but it's good that everyone else will now know
I did know of course, but it's good that everyone else will now know
I was always told there's no such thing as a stupid question - there is of course but I hope mine wasn't one of them. Learn something every day.
I do ask them occasionally myself
BTW, one interesting effect on BOM costs few in the auto industry saw comming is that competition for suppliers can come from those currently external to the industry, because the entire supply chain has been shaken up. The big Tier1 and Tier 2's (Bosch, Valeo, Denso, ZF etc) currently dominate the logistics chain for ICE. but new companies supplying EV components can actually UNDERCUT those suppliers because they have no existing, and potentially obsolete infrastructure that is tied hard into the existing supply architectures.
What I don't still understand is the cost, is it really just the battery because if you take the Kona for example, the ICE version has many more components including a complex engine and gearbox, exhaust system, etc... which the EV version doesn't need yet the EV version is vastly more expensive.
With the ID3 they've scrimped and saved at every corner and yet still the Golf 8 is cheaper.
How much do these batteries cost currently to cause that or is it just the development costs have to factored in for this new platform in VW's case?
With the ID3 they've scrimped and saved at every corner and yet still the Golf 8 is cheaper.
How much do these batteries cost currently to cause that or is it just the development costs have to factored in for this new platform in VW's case?
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