Volkswagen To Delay Production Of ID.2 Compact Electric Car

According to media reports, Volkswagen plans to postpone the production timeline for the ID.2 compact electric car. The reason behind this decision is the European Union's reduction of requirements for the Euro 7 emission standards, indicating that the approval time for selling small internal combustion engine cars will be longer than previously expected.

Volkswagen unveiled the ID.2all concept car in March of last year, and the ID.2 was intended to be based on this concept. Initially, Volkswagen planned to commence production of the ID.2 in 2025. However, due to the latest plans, the production start date for this model will be delayed until May 2026. Although Volkswagen still plans to launch the ID.2 in 2025, the company will only conduct small-scale production, with full-scale production slated to begin in 2026.

The starting price for the ID.2 is expected to be below €25,000 (equivalent to $27,200), with a price higher than contemporaneously launched internal combustion engine models like the Volkswagen Polo, which has a starting price below €22,000 in Germany.

Previously, Volkswagen and other European carmakers predicted that, due to the strict requirements of the Euro 7 standards, they might no longer be able to sell small internal combustion engine cars by 2030. However, influenced by widespread lobbying in the industry, EU member states agreed to maintain the current Euro 6 car and van testing conditions and emission rules. This means that automakers can continue producing small internal combustion engine cars without substantial investments in technological upgrades. Several car manufacturers had previously expressed concerns that the technical upgrades required by the Euro 7 standards would make it challenging for them to remain profitable.

However, the delayed production timeline for the ID.2 will put Volkswagen behind other European competitors, such as Stellantis, which has already released the Citroën e-C3 compact electric car with a starting price of €23,300, and Chinese automakers targeting the European market with plans to launch affordable electric cars.

Earlier, Volkswagen Brand Manager Thomas Schaefer announced that the company would adjust its European production network to reduce costs. Schaefer told the media that the production plans for new models would now be only 80% of the maximum predicted sales. In contrast to previous practices, Volkswagen's past production plans were typically higher than the expected sales to create a buffer to address unexpected high demand. For instance, if the sales department predicted an annual sales volume of 150,000 units for a model, the production plan for that model would be set at 170,000 units.

Schaefer stated that such adjustments would make the company more flexible in responding to a decrease in new orders without quickly encountering a significant excess production capacity. He revealed that if the sales of a particular model exceeded expectations, the additional demand would be met by increasing production shifts.