Facing increasing sales yet slower-than-expected growth in terms of demand, several automakers have dialed back planned investments in electrification recently. This includes Ford, which set a new personal record for U.S. EV sales in Q4 2023 and all of last year, yet also trimmed or delayed around $12 billion in planned investments in EVs and its future battery plants in Michigan and Kentucky, all while halving its planned Ford F-150 Lightning production for 2024 and canceling plans to build a joint-venture battery plant in Turkey. Just a few weeks ago, Volkswagen announced that it would not be scaling back its EV plans, but now, Automotive News is reporting that the German company and Ford partner will in fact delay volume production of its upcoming cheap all-electric model.
The new cheap EV – which is based on the recently revealed ID.2all concept – was originally planned to enter the full-blown production stage in 2025, but Volkswagen has since pushed those plans back to May 2026. It’s slated to start out at less than 25,000 euros ($27,200 USD), which would certainly help boost the company’s EV ambitions, but this move is being made due to changing regulations, it seems.
Prior Euro 7 regulations dictated the end of new ICE vehicle sales by 2030, but following a strong lobbying effort from the automotive industry, those plans have changed, and now, EU countries have agreed not to alter the existing Euro 6 test conditions and emissions limits for cars and vans. This means that automakers can continue to sell smaller gas-powered vehicles longer than expected, which is precisely why Volkswagen is shifting its production timeline for this affordable EV.
Previously, VW warned consumers and investors that the demand for all-electric vehicles has not grown quite as quickly as most expected, with its own European order total for those types of vehicles being cut precisely in half – from 300,000 last year to 150,000 this year, even though orders did increase in Q3 and the remainder of 2023.