Volkswagen’s newest model, ID.3, could be Tesla’s Model 3 closest challenger

A recent study has indicated that Volkswagen‘s newest electric vehicle (EV), the ID.3, can reach the standards of Elon Musk’s Tesla Model 3.An up-close look at its parts revealed several similarities between the German design and the American creation.

Analysts from UBS Group AG, a Zurich-based investment banking company, found out that the ID.3’s price is also as competitive as the Tesla models. According to UBS’s Patrick Hummel, an analyst with the firm, the car’s energy density and efficiency match the American model. “[The car] is the most credible EV effort by any legacy auto company so far,” said Hummel.

Volkswagen Group (VW) started the production of this much-anticipated EV model in 2019. The production faced a couple of glitches which led to delays in the completion and delivery to customers. Among the hindrances to this project’s success in the stipulated time was the inevitable Covid-19 pandemic that hit the world in early 2020.

Despite the pandemic and software hiccups, ID.3 rose to its glory with German customers’ first deliveries in September 2020. Since then, electric car sales have jumped drastically. In a recent report, the German automaker’s common shares rose to 5.6 % to 209 Euros.

This value is the highest since 2015 when Volkswagen’s executive changed. When Herbert Diess took over as the company’s Chief Executive Officer, the company revealed new financial targets. Herbert joined the automaker from BMW AG, Munich-headquartered luxury vehicles company.

“The market has been waiting for Volkswagen’s battery-electric vehicle production to ramp up, and for proof points. So, here we are,” stated Diess in a tweet. The ID.3 is targeted at the European market. Furthermore, Volkswagen has started developing the next model, the ID.4, to be produced in Germany and Volkswagen’s factories in China and the US.

Other subsidiaries of the Volkswagen Group are expected to introduce new models in 2021 to scale up its car sales and shares. These include new designs from Audi, Skoda, and Seat. Besides, VW has agreed with American carmaker, Ford Motor Company, to make a modular battery-powered car, which will add to the German company portfolio.

“VW might not be the Apple, but the Samsung of the EV world, with profitable, high volume EV brands,” said Hummel. UBS’s report estimates ID.3’s gross margin will be around 15%. This value comes close to the company’s Golf-model, an internal combustion engine (ICE) vehicle.

By the end of this year, the company seeks to increase its EV shares by twofold to at least six percent. The increment will reduce the gap between VW’s economies and those of Tesla. In 2021, Tesla’s sales target is at least 750,000 cars. By making its target around 700,000, Volkswagen Group is competing closely with the American EV giant.

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