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Volkswagen bets big on electric. Will European consumers buy in?

Herbert Diess, chief executive officer of Volkswagen AG,

Herbert Diess, chief executive officer of Volkswagen AG, poses beside a VW ID.3 electric car ahead of the IAA Frankfurt Motor Show, which begins Sept. 12. Photo Credit: Bloomberg/Krisztian Bocsi

FRANKFURT, Germany — Volkswagen is rolling out what it bills as the breakthrough electric car for the masses, the leading edge of a wave of new battery-powered vehicles about to hit the European auto market. The cars are the result of massive investments in battery technology and new factories driven by environmental regulation and concerns about global warming.

But it's not at all clear whether consumers are ready to buy them.

Electric cars remain a niche product with less than 2 percent of the market due to higher prices and worries about a lack of places to charge. It adds up to a risky undertaking for the companies.

Volkswagen is betting that the ID.3, with a roomy interior, brisk acceleration and battery range of up to 340 miles for the top model, will change things. The company argues that the base price of under 30,000 euros, or about $33,000, means the ID.3 is "an electric car for everyone." A key competitor, Tesla's Model 3, starts as low as 36,800 euros (about $40,000) in Europe, but the company's website indicates it can run to well over 40,000 euros depending on options.

The ID.3 went on display Monday ahead of the Frankfurt Motor Show. Volkswagen is also revealing a new logo; both moves are aimed at underlining the company's transformation since its 2015 diesel scandal, in which the company was caught using software to cheat on emissions testing and paid more than $33 billion in fines and penalties. The company is positioning itself as younger and more oriented toward digital services and zero local emissions electric driving.

The company touts the ID.3 as a historic vehicle, the third chapter in the company's history following the Beetle, which became a symbol of postwar German prosperity, and the Golf, of which Volkswagen has sold more than 35 million since 1974.

Volkswagen will start selling it in Europe next year, while in the United States it will first launch an electric SUV at an as-yet unspecified date.

The German company is deploying massive financial and manufacturing capabilities to make a success of its electric cars, saying it will have invested 30 billion euros in this area by 2023. It has sunk 1.2 billion euros into a factory in Zwickau in eastern Germany to make the ID.3, the first of eight electric-car plants worldwide including one in Chattanooga, Tennessee. The company, which sold 10.8 million vehicles last year, aims for 40 percent of its sales to be electrics by 2030.


 


 


 

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