Volkswagen fuels Chinese pricewar with 30% cuts on ID.4

“We don’t partake in price wars; it is unsustainable,” said Thomas Schäfer, boss of the VW brand at the IAA Mobility 2023 in Munich. He bluntly forgot about his company’s operations in China. After a sales revival for the discounted ID.3, Volkswagen’s Chinese joint venture VW-FAW is repeating the move for its sibling ID.4.

Today, the ID.4 Crozz version starts at 145 900 yuan (18 500 euros) for Chinese customers, a decline of almost 25% compared to the initial launch price in early 2021, when the model cost 193 900 yuan (24 600 euros). It’s worth noting that the current promotion for the ID.4 Crozz is initially limited to 3 000 units. However, expectations are that the offer will continue after the selected units.

Crozz is not X

It is not the first time Volkswagen has adapted its prices for the ID.4 Crozz. In July, the price drop was 34 000 yuan, down from 183 900 yuan. The SUV sibling to the ID.3 has become 72 000 yuan cheaper within a few months, or 9 170 euros. In other words, the ID.4 Crozz has become 33 percent cheaper since July.

The promotion is only eligible for the ID.4 Crozz version from the FAW collaboration. The ID.4 X, built in a joint venture with another local car maker, SAIC, hasn’t been discounted. The X is a shorter and slightly different styled version of the ID.4, featuring a propriety light signature and bumpers, only available in China. This could point to overstock at the FAW plant.

Soaring sales for ID.3

Volkswagen’s approach to the ID.4 pricing is similar to that of the ID.3 promotion, a vehicle built in collaboration with SAIC. Registrations soared after it slashed prices by 16% on its all-electric hatchback. The increase represented a whopping 305% in late July.

It was a first for the ID.3 that month to pass the mark of 5 000 monthly units in China. The performance in August was even more staggering, boosting sales to more than 10 000 units due to the new pricing strategy.

Losing ground

Whether the carmaker is making money on those cars or is just aggressively reconquering market share is doubtful. At the IAA Mobility in Münich, Volkswagen Group boss Oliver Blume acknowledged that cars built on the MEB and PPE architecture, like the ID.4 Crozz, don’t reach profit parity with ICEs – a task for the upcoming all-new SSP platform.

Volkswagen’s lagging EV sales in China have been a vital issue. As Tesla kickstarted a price war late last year, eagerly followed by Nio, BYD, Xpeng, and many more, the German brand started losing ground fast.

During the year’s first quarter, it ceded its number-one position in the overall sales charts, beaten by rising star BYD. Historically, VW has been China’s number-one car brand since registration data have been made public.