Volkswagen is doing too little to promote sales of electric cars, says Greenpeace. The organisation just published a paper following probing conversations it had at 50 dealerships in Germany during a mystery shopping spree.
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They hoped to be recommended the ID.3, they mostly drew blanks and found multiple explanations for why VW might have problems getting into selling EVs.
The Greenpeace “buyers” or secret shoppers with a mission, used a uniform profile that would fit the ID.3, the organisation writes. It included daily routes no longer than 200 kilometres, a garage to charge and a sufficient budget.
Half of the mystery shoppers came to one of the 865 VW dealerships offering the ID.3 on behalf of VW pretending to be entirely open. The other half approached the dealers saying they were only uncertain whether to opt for the ID.3 or the Golf 8.
Despite the matching profile and sometimes expressed interest, VW dealers still recommended a car with an internal combustion engine in 27 cases and advised to buy an ID.3 directly in only eight conversations, Greenpeace found.
The “fixation on internal combustion engines” according to Greenpeace, was particularly evident when the mystery shoppers did not mention the topic of e-mobility at the beginning of the conversation. In 17 out of 25 cases the VW salespeople then recommended a combustion engine. Only once an ID.3 was suggested, it says in the paper.
Besides, there was a lack of comprehensive sales training and sound knowledge about VW’s electric models, Greenpeace reports. The mystery shoppers also asked five questions designed to find how well informed the sales personnel were about electric driving. The testers’ inquiries included data on charging infrastructure and charge times, such as whether an electric car would burn more easily. Greenpeace found dealers to have not got a comprehensive answer to 48% of the questions.
They further cite anonymised dealers’ statements, saying the conditions for selling VW cars with internal combustion engines are significantly more lucrative. As a backdrop, when VW introduced the ID.3 electric car, it came on the back of a new sales model. Rather than buying the car, dealers now serve as agents. However, this is associated with a significant reduction in the dealer margin. Greenpeace again cites dealer circles, saying the basic margin for combustion models is 14 per cent; it is only 6 per cent commission for the ID models.
The agent model also means that dealers have no margin for discounts, a crucial sales mechanism at any car dealership. At the same time, anyone willing to buy an ID.3 must wait for the dealer to order the car as they won’t have it in stock like other conventional models.
There are also questions about commissions. VW told Greenpeace that their programme would “disproportionately promote” the ID.3 and the agency model also gives dealers a share when an ID.3 is sold online. At the same time, dealers told the organisation that there was no particular “e-scheme” that would incentivise them to sell as many electric cars as possible, while those volume-based models exist for other VW series.
The same holds for leasing. VW has now put a “special leasing” offer for the ID.3 in place, but above the 200-euro threshold that VW likes to underscore with discounted PHEVs and ICEs, Greenpeace finds.
The report also contains some sales data to support the allegation that VW isn’t being über-keen on selling electric cars. According to the KBA, responsible for Germany’s registration statistics, 2,439 ID.3 were bought in November 2020. That is less than Renault Zoe (4,287) and Hyundai E-Kona (2,471). Since the start of deliveries in September, a total of only 7,349 ID.3 have been registered across Germany. Of these, more than 3,000 were registered to VW itself or VW dealers, Greenpeace reports.
The organisation also weaves the EU emission regulation into their argument, which makes selling an electric car in 2021 more worthwhile than this year. Greenpeace suggests that it pays for VW to sell more ID.3 next year, given that demand is limited. While this is an allegation, the argument has been made for other car manufacturers before and VW is planning an upgrade for the ID.3 to come in just in 2021.
And while CEO Herbert Diess may have been confirmed in his course for intensifying efforts in e-mobility, he has also requested to make the VW brand more profitable – something that is still not as easy to do with lower-priced electric cars as with fossil-fuel-powered models.
Update 22 December 2020: Volkswagen has reacted to requests to comment following Greenpeace’s findings that they would do too little to push electric cars’ sales.
“No other automaker is promoting the transformation towards electric mobility as massively as Volkswagen. The Volkswagen brand alone is investing 11 billion euros in e-mobility between 2020 and 2024,” reads the recent statement.
Volkswagen also pointed to its incentive, saying that the VW ID.3 is “even disproportionately promoted”. This is as much as they had told Greenpeace before. Volkswagen did decline again to provide further details on dealer margins “for competitive reasons.”
We imagine that this is as good as confirmation that the dealers who spoke to Greenpeace were right when they said that the basic margin for combustion models was 14 per cent and only 6 per cent commission for the ID models, according to the report.
At the same time, Volkswagen is indeed more invested than most other carmakers in electric mobility. In the course of its latest investment planning round for 2021 to 2025, Volkswagen set aside around 73 billion euros in the future-oriented topics. A total of 35 billion euros has now been budgeted for electric mobility, two billion more than before. So, 2021 will be the time to deliver literally.
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