Leaked & Confidential Volkswagen ID.4 Strength/Weaknesses Assessment

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Cars

Published on January 3rd, 2021 | by Alex Voigt

January 3rd, 2021 by  


Every day, videos are recorded and articles are written comparing the different competing electric vehicles (BEVs), but you never see an internal confidential analysis from automakers. It’s a well-kept secret how automakers rate the competition aside from their public marketing and PR messages. Today, I have the pleasure of revealing confidential Volkswagen documents that compare the strength and weaknesses of the ID.4 against the Tesla Model Y, BMW iX3, Volvo XC40, Kia e-Niro, Peugeot e-2008, MG ZS EV, Hyundai Kona EV, and DS3 e-Tense.

Understanding the strengths and weaknesses of your competitors is an important part of developing a better product, one that stands out and shines, and selling it successfully. Therefore, entire departments tear down competing products and test them inside out to hopefully position themselves well. That’s true for most industries, and it’s especially true for highly competitive industries like the automotive one. 

To get hold of a confidential document from Volkswagen that explains how all other relevant BEVs rank against the ID.4 gives us a lot of insight — not only insight about the perceived strengths and weaknesses of the ID.4, but also what Volkswagen considers important for consumers and where they simply could not do better.

I received such a confidential (big thanks to Antoine) leaked document and decided to publish the key parts of it here. It reveals that not everything Volkswagen claims in public to be a strength of the ID.4 is seen from management as one. In private life, to say something different from what you know is usually called a lie. Some parts of what Volkswagen’s marketing, public relations, and management say in public could be labeled like that. 

To succeed in business, you can hide the truth, but when customers test the car, they will discover the truth anyway and can be disappointed. I believe the current strategy from automakers to pretend they deliver what they don’t is not a sustainable approach to win customers in the long term, but is one that can make the automakers lose those customers for a long time, maybe even forever. If you lose your credibility, you lose everything.

Volkswagen categorizes the ID.4 competition into 3 groups:

  • Premiums (iX3, Model Y, XC40), 
  • Compacts (eNiro, e2008, ZS EV) and 
  • Urbans (Kona, eTense)

Although many of the vehicles are not yet delivered and are scheduled for 2021, their key characteristics, specifications, measurements, and functionality are summarized in a comprehensive spreadsheet intended to give the dealership salesperson all of the arguments needed to convince the customer that the ID.4 is the better car to buy.

I don’t want to dive deep into the listed specifications, but I must say that some are to my best knowledge incorrect, inaccurate, misleading, or at least incomplete. Because the document is intended for VW contract dealers who sell the ID.4 in the VW agency model, Volkswagen management may have decided to inform their salespeople only of their “version of the truth.”

Because a large portion of my life I was a software salesman myself, I can speak from experience when I say: it’s not a good idea to keep your salesmen badly or even wrongly informed about key known specifications and facts of the product. If you do, you should not be surprised if customers with knowledge are disappointed with the salesmen’s knowledge and process. Surveys around the globe show us that consumers who are in the market for a BEV are disappointed with the knowledge base of dealers. Such competitive analysis and specification documents may be one reason for it. The Volkswagen mystery buyer study from Greenpeace resulted in about 50% incorrect or inaccurate answers from dealers about BEVs. That’s not good.

I leave a deep dive analysis about the list of specifications Volkswagen provided to its dealers. If you want more content, feel free to reach out to me (Twitter @alex_avoigt).

The motivation for the salesmen to sell an ID.4 or ID.3 is, as I pointed out in my previous article, limited, because dealers make much more profit on a fossil vehicle sale than an ID.4 sale. The overview and sales arguments provided therefore apply only if someone enters the dealership and make it clear they want a BEV and are not interested in a hybrid, PHEV, or 100% fossil fuel vehicle. We all know salesmen will not necessarily respect such a request and will instead continue to try to sell what is better financially for them. Some salesmen will even use the below specifications to explain to customers why they better just buy a car with a combustion engine.

Because such a comprehensive spreadsheet contains a lot of details, Volkswagen decided to provide an additional sales tool with a handy overview of the advantages and disadvantages of all BEVs available compared to the ID.4. Since customers will of course compare, it makes a lot of sense to do so. That analysis gives us unique insight into the thought process of Volkswagen’s top management and how they rank, for instance, the Tesla Model Y, BMW iX3, or Hyundai Kona EV against the ID.4.

By declaring the strengths and weaknesses of its competitors, Volkswagen simultaneously declared strengths and weaknesses of the ID.4.

As the document is in French, I will translate the most important vehicle comparison, which is the Model Y’s, but I also recommend reviewing how the other vehicles are rated by VW.

Advantages VW considers the ID.4 1st to have compared with the Model Y:

  • + Price
  • + Incentives
  • + Handling
  • + VW distribution network
  • + Availability in 2020

Let’s look more closely at these.

Price: The ID.4 1st is available for a base price of €47,950 and the ID.4 Max for a base price of €58,950, but after configuration, the end prices from VW are usually much higher. The Model Y instead includes almost all functionality, specifications, and extras in the base version already, and as of now costs €63,000 in France. I assume that a configured ID.4 will typically have a similar price level as the Model Y, but compared like to like will have less functionality (e.g., lacks Autopilot).

Incentives: The ID.4 receives an incentive of €3,000 more than the Model Y in Germany because of the Model Y’s higher base price, but Autopilot alone or the comprehensive entertainment system that is included as a standard is, in my opinion, worth that difference. This may be different in every country, but the functionality in the base Model Y is not.

Handling: While the ID.3 and ID.4 are praised for their handling, the same is true for the Model 3 and Model Y. Both are direct, nimble, and fun to use. What can be said is that the turning radius for the Tesla models is larger, which is indeed a disadvantage, but besides that, I would give a recommendation for handling to the Model Y. To rate the ID.4 better is not correct, or a misleading assessment from VW.

VW distribution network: The Tesla online sales model has proven to be superior to any dealership model from incumbents. This is visible, for instance, in the growing market share for Tesla while Volkswagen lost about 25% market share in 2020 during the time of the pandemic — during which most people avoided direct contact with a dealer and preferred to shop online. To call the VW distribution network an advantage may make the dealers who read the document feel good, but it is not correct. The online sales tool from VW is rather complicated and complex, making it difficult and painful to go through compared to Tesla’s. Meanwhile, the badly incentivized dealers when it comes to ID.4 sales are a structural financial disadvantage.

Availability in 2020: The Model Y is already being delivered in the USA in 2020 and China beginning this month. VW postponed ID.4 deliveries in Europe from late 2020 to Q1 2021, while the Model Y is scheduled to be produced and delivered from Giga Berlin in July. An earlier European delivery could happen with the China-made Model Y. Considering the fast construction of Giga Berlin, meanwhile, it’s expected that the Y could start production and delivery in Q2. In that respect, the ID.4 is hardly available earlier in Europe, and many months later in the USA and China. Because the European market is comparably smaller, I would define availability in the global context in which mass delivery will happen as sitting at a disadvantage, not an advantage.

Disadvantages VW considers the ID.4 1st to have compared with the Model Y:

  • – Engine power and all-wheel drive
  • – DC charging
  • – Charging infrastructure
  • – Connectivity

The list of disadvantages Volkswagen listed for the ID.4 compared to the Model Y is longer than it gives to any other vehicle, but it is still missing a lot of critical components, like efficiency, Autopilot, infotainment, OTA updates, top speed, and range. The reason for Volkswagen to not include these points — matters many customers are certainly interested in — could be that together they imply the ID.4 is inferior.

Engine power and AWD: Acceleration, top speed, and agility are only a few items that should be named, but the ID.X line is a few levels lower than all Tesla models in all of these categories. Accelerating from 0–60 mph in 3.7 seconds is more than twice as quick as the ID.4’s performance of 8.5 seconds. A 160 km/h top speed with the ID.4 is 81 km/h slower than a Model Y’s top speed. Those are huge differences and make an ID.4 very slow compared to the Model Y.

DC charging: Fast charging is the main advantage I would mention. It provides a lot more flexibility to travel without the challenges of range anxiety. The ID.4 is restricted to only 125 kWh ultrafast charging, which is low compared to the V3 Supercharger Network from Tesla offering 100% more with 250 kWh. The Ionity fast-charging network, which VW is a founding member of and which is expanding in Europe successfully, offers 350 kWh, but the most important VW BEV, the ID.4, is unable to benefit from it.

Charging infrastructure: With a Tesla, you can use available chargers from different service providers, so you have a huge advantage since you can also use the fast-expanding Supercharger Network, which is available in many rural and urban areas.

Connectivity: VW admits that the ID.X line has a disadvantage in its software abilities, and connectivity is only one of them. Not only are ID vehicles still unable to perform real OTA updates, but the functions that can be updated in a dealership today are also limited compared with what a Tesla can do over the air at home. Software is one of the largest challenges VW has, and it’s not clear whether its bugs and problems will be solved soon.

While the listed ID.4 weaknesses compared to the Model Y’s are the most of all other competitors, VW does not see consumption and efficiency to be included. Also, more and more important driving assists and autonomous driving capabilities are purposely excluded from the assessment. It is quite important for a VW salesperson to find a good argument against the Autopilot system from Tesla if a potential buyer brings that topic into the discussion, but they cannot do so.

My mission is to help German automakers manage the transition to sustainable transportation successfully. Therefore, I’m including a direct message to Volkswagen.


Dear Volkswagen, 

What you’ve achieved with the competitive ID.4 assessment you’ve equipped your dealerships with is you are making it difficult for your salespeople to sell your product. Providing your customer-facing representatives with misleading, lacking, and partly even wrong information with regards to advantages and disadvantages of the ID.4 versus the Model Y, to name one important competitor, leads to the frustration of informed customers and the disappointment of uninformed ones who buy and experience the ID.4. Both are negative outcomes for potential and existing VW customers and will result sooner or later in lost market share.

While the Model Y is just one example and other competitors in the class of the ID.4 show similar assessment issues, the Model Y is the most important since it’s the vehicle that has the highest sales in its segment and the best specifications on the market.

Nobody expects the ID.4 to be better or even similar with regards to core specifications, but to hide and not mention key information to your salespeople makes them look badly informed during customer interactions.

I don’t know if it’s done on purpose, but it is not helpful in your ambition to make the ID.4 the “world’s car” and VW a serious player in battery electric vehicles.

In my previous article, I already expressed my frustration about not being honest to us consumers, but can it be that the same is true with regards to your dealerships?

Integrity and honesty are key for your credibility, and because of the cheating device scandal, Volkswagen should take extra care.

I wish you great success with your BEVs in 2021, and specifically with the ID.4 launch. 
 


 


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About the Author

Alex Voigt has been a supporter of the mission to transform the world to sustainable carbon free energy for 40 years. As an engineer, he is fascinated with the ability of humankind to develop a better future via the use of technology. With 30 years of experience in the stock market, he is invested in Tesla [TSLA], as well as some other tech companies, for the long term.



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