Yahoo Finance Volkswagen Canada CEO: Cheaper EVs ‘not going to happen overnight’
In a time of soaring car prices, Volkswagen has not lost the affordable ethos of its iconic Beetle, Golf, and Jetta models as it looks to an electrified future, according to Volkswagen Group Canada’s president and CEO.
“That is the essence of our brand,” Pierre Boutin told Yahoo Finance Canada in an interview. “We want to market to the majority of Canadians.”
Boutin oversees the German automotive giant’s Canadian operations. In showrooms, he’s rolling out new pure-electric vehicles based on the company’s modular platform, starting with a crossover, and soon a minivan with a nostalgic nod to Volkswagen’s hippie-era buses.
“While we have a premium product, a German build-quality vehicle, we also recognize the needs of Canadians. We want to tailor to the Canadians, including to their budget,” Boutain said. “We’ll continue to focus on the affordability aspect for Canadians, including through our electric vehicle strategy.”
While the average price of a new vehicle in Canada hit a record high in March, the number of Canadian zero-emission vehicle registrations slipped from a record high. Meanwhile high interest rates and inflation suggest sales of electric vehicles could slow even further.
The International Energy Agency said in April that it expects price parity in small and medium-sized electric cars in the North America somewhere in the mid-2020s. Until that is achieved, Boutin says financial support from governments will play an important role.
“There is still a lot of research and development, and a lot of mining that needs to happen,” he added. “The recycling side of the industry needs to speed up. All of these elements will contribute to more affordable vehicles, lowering the cost of the technology as we move forward... but it’s not going to happen overnight, quite frankly.”
Electric Mobility Canada president and CEO Daniel Breton says U.S. Environmental Protection Agency rules shared with Canada have made all vehicle categories less affordable. Larger vehicles are allowed to emit more from their tailpipes than smaller cars. He says this makes it easier for automakers to sell higher-priced sport utility vehicles and crossovers, while eliminating smaller, more affordable cars from dealer lots.
I understand that people want to buy SUVs, but not everybody.Electric Mobility Canada president and CEO Daniel Breton
“My wife drives a Smart Fortwo electric drive. It’s a very small electric car. It was sold at a reasonable price. Mercedes stopped selling them altogether in North America. The day that her car dies, she might not be able to buy anything that compares to that,” Breton said. “I understand that people want to buy SUVs, but not everybody.”
Boutin says trucks and SUVs now represent nearly 80 per cent of Volkswagen’s business in Canada, a major shift for a brand historically associated with sedans, hatchbacks, and wagons. He’s certain this trend will carry into the electric vehicle market.
“Canadians have been shying away from small passenger cars,” he said, explaining the "ID.4" crossover model, which launched in this country in the summer of 2021, is “at the heart of what Canadians love to drive, and are used to.”
Breton argues VW would have a smash hit on its hands if it brought the cheaper, smaller, Golf-like "ID.3" hatchback to Canada. Boutin says that’s not part of the automaker’s plans.
“A lot of people like the VW brand, and a lot of people are looking for smaller, more affordable cars,” Breton said. “To me, if they had the guts to do it, they would grab the market.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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