The issue of price inflation, also known as “market adjustment” by dealers, has reached alarming levels. It is unreasonable for individuals to be charged exorbitant amounts for vehicles like the new Nissan Z or the Toyota GR Corolla. The spotlight is now on the highly anticipated Volkswagen ID Buzz, with the potential for dealer markups on the horizon unless VW takes preemptive action.
Pablo Di Si, the Chief Executive Officer of Volkswagen North America, recognizes the significance of the ID Buzz for the brand’s presence in the US market. As VW struggles to recover market share post-dieselgate, its enthusiast base is left questioning the brand’s transformation. The ID Buzz is eagerly awaited by fans, but its success may be jeopardized if consumers face difficulty in acquiring one.
“We must ensure a flawless execution with this model. Considering the customer’s perspective, we must address this issue. Our relationship with the dealership network is strong,” stated Di Si. “We are committed to preventing markups.”
The primary challenge will be production capacity. While the annual production quantity of ID Buzz EVs remains undisclosed, the anticipated demand is substantial. The production facility in Hanover, Germany, where the ID Buzz will be manufactured, has a capacity of about 100,000 units per year, as reported by Automotive News. This may only be the beginning.
Speculation suggests VW may build the ID Buzz in Chattanooga, Tennessee alongside the ID4. This move would align with recent alterations in tax credit regulations under the Inflation Reduction Act and the enduring 25% tariffs imposed through the historic Chicken Tax of 1963. However, current plans for domestic production are mere rumors. If the ID Buzz is exclusively manufactured in Germany, it would not qualify for the $7,500 tax credit.
Di Si suggests that leasing the ID Buzz could be a viable option for customers. The Commercial Clean Vehicle Credit, a subsidiary of the IRA, offers a workaround enabling lessees to benefit from the $7,500 credit. Despite the ID Buzz not being produced in the US, this credit allows VW to pass on the $7,500 savings to lessees, making leasing an appealing choice. It remains unknown if the demographic interested in purchasing the ID Buzz overlaps with those considering leasing options.
“We must find an equitable solution for consumers and dealers to prevent unjustified price hikes that could disrupt the system,” emphasized Di Si. “We have approximately three to five months to resolve this issue. The solution has yet to be determined.”
The introduction of the iconic electric bus into the US market is still a significant time away. VW has not disclosed the pricing for the US market, leaving the cost of the ID Buzz uncertain, yet anticipation suggests it will be a substantial investment. What is clear is VW’s commitment to preventing dealers from exploiting customers when it comes to such a crucial vehicle for the company.
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