Volkswagen AG’s VOWG_p.DE U.S. subsidiary on Wednesday revealed its ID.4 electric sport utility vehicle and a pricing strategy aimed at opening a new front in competition with Tesla Inc and other automakers.
The ID.4’s driving range is less than Tesla’s Model Y electric compact SUV, which offers more than 300 miles (483 km)between charges.
But Volkswagen is hoping to offset that by offering the ID.4 at a lower price than Tesla’s Model Y. Customers can further benefit from federal and state electric vehicle subsidies for which Tesla no longer qualifies.
The ID.4 will initially come at a price of $39,995 and will be about $5,000 less expensive once the company begins building it in the United States, Volkswagen said.
By comparison, Tesla’s Model Y is priced at $49,990, the Model X SUV comes at a price of $79,990 and its lowest-priced Model 3 sedan is $37,990. Tesla CEO Elon Musk on Tuesday said he is aiming to build a $25,000 electric car, but that is three years away.
The ID family is an integral part of the Volkswagen brand’s ambitious plan to build 1.5 million electric vehicles a year by 2025. In the U.S. market, the ID.4 also is aimed at getting Volkswagen back on the shopping lists of consumers turned off by the brand’s diesel emissions cheating scandal.