Volkswagen released the ID.4 for the 2021 model year, taking a chance on debuting their first global EV and first all-electric SUV. In the years since the ID.4 has been a success. It was the fifth best-selling EV in the United States in 2023 and has won a host of awards. The ID.4 has been named an Editors’ Choice by Car and Driver, a Top Safety Pick by the Insurance Institute for Highway Safety, and the Drivers’ Choice award for best EV by MotorWeek. With all of those strong tailwinds at their back, you might think that Volkswagen would be eager to release the next model in its EV lineup. However, the brand seems to have cold feet about introducing the North American market to the ID.7, an EV that has already been released in Europe.
The ID.7 is a midsize sedan based on the same platform as the ID.4, and it was supposed to make its North American debut during the third quarter of 2024. However, on May 22nd, Volkswagen announced that it would be “delaying the introduction of the ID.7 sedan in the US and Canada.” Why did VW push back the date for the ID.7, and what does it mean for the future of the North American division of the brand? Let’s dig into the details and find out what’s going on.
What We’ve Heard Directly From Volkswagen
The press release from Volkswagen is only three paragraphs long and pretty short on details. It says that the model is being delayed but doesn’t say when the new launch date is expected to be. Instead of a clear reason for the delay, the release simply hints that this decision is being made “as market dynamics continue to change.” The release also makes sure to boast about the success of the ID.7 in Europe and the “various international awards” it has won, which makes it clear that VW is not reversing course altogether when it comes to electrification, assuring readers that the ID.Buzz (an all-electric version of the iconic VW Microbus) will arrive in North America in the fourth quarter of 2024. On top of that, Volkswagen shares that it experienced strong North American sales in the first quarter of the year, “driven by its SUV segment.”
Sedans Are Less Popular in the North American Market
Putting together the mentions of changing market dynamics, a continued commitment to electrification, and the popularity of SUVs, we can infer that the VW press release is implying that the ID.7 is being delayed not because it’s an EV, but because it’s a sedan. It’s true that sedans and hatchbacks aren’t as popular in North America as they are in other markets, with many drivers across the US preferring SUVs. But there are plenty of reasons to think that this isn’t the whole story.
For one thing, the North American market for EV sedans is present enough to already be supporting several models. The Hyundai IONIQ 6, Tesla Model 3, and BMW i4 are a few of the most well-known examples. Since the range is still a factor keeping nervous drivers from going fully electric, sedans have an advantage over electric SUVs. If you put the same battery in a sedan body and an SUV body, the sedan will almost certainly get a better range since sedans tend to be smaller, more lightweight, and more aerodynamic than SUVs.
The question of body style may well be a factor in VW’s decision-making. They may not be so sure that the market will bear a new entry into an already competitive segment. But trends have been shifting toward SUVs for a while now, certainly since well before the ID. 7’s North American debut was announced in the first place. It’s likely that there’s another element at play.
EV Growth in the States Has Slowed (For Now)
Something that’s newer than the shift from sedans to SUVs is the slowing of growth in the EV segment. Before we go any further, let’s be crystal clear about what that means because it can be a bit confusing. Americans are still buying more EVs every year, but the rate of that growth is getting less dramatic. While EV sales for the first quarter of 2023 were 46.4% higher than those of the first quarter of 2022, Q1 of 2024 was merely 2.6% higher than the figures in 2023.
This slowdown is largely to be expected as EVs shift from an exciting novelty to a mainstream form of transit. This is nothing that hasn’t been seen before with other new technologies. As early adopters get excited and turn up in droves, growth is fast. However, that first wave eventually comes to an end since drivers tend to get new vehicles every few years, not every few financial quarters. The second wave consists of people who aren’t as naturally excited about the concept of all-electric vehicles and need to be convinced. That convincing takes time, resulting in slower growth.
While EV skeptics may feel justified by the numbers, it’s hard to argue that vehicle electrification isn’t still in full swing. EV sales are still growing each year, after all. And on top of that, hybrid sales are still growing at a clip, up 48% in the first quarter of 2024. The trends are still pointing in the direction of an electric future, but no large-scale change can happen overnight and there are bound to be bumps in the road.
How Might American EV Trends Be Affecting the ID.7
Consumers cite three main factors when polled about their odds of buying an EV in the future. The first is infrastructure—people want EV charging stations to be more ubiquitous and more reliable. This is heading in the right direction, and in many parts of the country, there are abundant charging stations, with more getting built all the time. It’s not really something that Volkswagen can directly control unless they want to get into the public charging station game. Certainly, it’s nothing they can control with the design of the ID.7 in particular. The second factor is range—people want to be able to go a long distance on a single charge. By this metric, the ID.7 shouldn’t have a problem; it’s expected to provide over 300 miles of range, which is in line with what other EVs in its segment offer and in line with what drivers are looking for.
The third factor is price, and this is the one that may help explain the delay of the ID.7. Volkswagen is calling the ID.7 a “near-luxury” model, a term that’s certainly meant to signal high quality and plenty of desirable features, but also sounds like justification for a price that will likely be high to match. It’s easy to wonder whether that term will be forgone by the time the ID.7 does make it to North America and if some aspects of the design will be changed to cut down costs so the model can be offered at a more appealing price than originally planned.
New Release Date Not Yet Specified
While it’s possible to look at some potential reasons that the VW ID. 7’s North American launch has been delayed, it’s harder to predict when or if the model will actually make an appearance in the US and Canada. If the ID.Buzz does indeed launch on schedule, then VW will probably look at how well it does in North America and keep that information in mind when deciding the fate of the ID.7. We’ll just have to wait and see.
