Price gouging—or, as some dealers call it, "market adjustment"—is out of control. There's no reason that someone should be paying six figures for the new Nissan Z or the Toyota GR Corolla, yet here we are. And now, they're coming for the all-new Volkswagen ID Buzz next...unless, of course, VW can stop dealer markups before they even begin.
Pablo Di Si, the CEO of VW North America, knows that the ID Buzz is an important vehicle for the brand in the United States. VW needs all the help it can get as the brand struggles to gain market share in a post-dieselgate era and its loyalists are left wondering what happened to their favorite cool car company. The ID Buzz is one of the most hotly awaited VWs in generations, but if consumers can't get their hands on one, what's the point?
"We cannot make a mistake [with] this vehicle. With respect to the customer, let's discuss it. We have a good relationship with the [dealer] network," said Di Si. "We cannot have markups."
The biggest bottleneck will be production capacity. It's not clear how many ID Buzz EVs will be built each year; however, it's clear that anticipated demand is high. The automaker's assembly plant in Hanover, Germany, where the ID Buzz will be assembled, has an annual production capacity of around 100,000 units, according to Automotive News. That may be just the tip of the iceberg.
Rumors have been circulating of VW's potential plan to build the ID Buzz in Chattanooga, Tennessee alongside the ID4. This domestic production location would make sense given the recent changes to the tax credit requirements as part of the Inflation Reduction Act and the existing 25% tariffs imposed as part of the so-called Chicken Tax of 1963. As of today, domestic production is simply a rumor and nothing more. As it stands, if the ID Buzz is assembled only in Germany, it would not qualify for the $7,500 tax credit.
Di Si is instead hoping that customers choose to lease the ID Buzz instead. The Commercial Clean Vehicle Credit, which is a subset of the IRA, is a workaround that would enable customers to take advantage of the $7,500 credit. This credit allows VW to pass on the savings of the $7,500 credit to leasees despite the ID Buzz not being built in the U.S., which makes leasing an attractive option for potential customers. Whether or not the demographic of buyers springing for the ID Buzz also overlaps with those leasing vehicles is a mystery, at least for now.
"We need to find a fair way for the consumer and the dealer. There's no overpricing, that the system doesn't crash," said Di Si. "We have, I would say, another three to five months to figure it out. We don't have the solution yet."
The iconic electric bus has quite some time before it hits U.S. soil. VW also hasn't mentioned a price for the U.S. market, meaning that nobody knows exactly how much the ID Buzz is going to cost, but we already expect the EV to fetch a pretty penny. What we do know is that VW doesn't want dealers gouging its customers on a car so important to the company.
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