VW Not in a Hurry to Challenge the Tesla Model 3

• Volkswagen delays the introduction of the electric ID.7 sedan in North America, citing "market dynamics," and has not indicated when the sedan will arrive stateside.

• The ID.7 was initially expected to go on sale in the US in the second half of 2024.

• Automakers have largely avoided challenging the Tesla Model 3 directly, with the exception of Hyundai Ioniq 6, preferring more asymmetric responses positioned higher in price and luxury features.

If you've been waiting for an electric midsize sedan from Volkswagen, you will have to wait a bit longer. The automaker unexpectedly announced this week that the ID.7 sedan's introduction to North America has been delayed, and has given no indication of when it might make it here.

Why is the ID.7 delayed?

Volkswagen certainly gave one strong hint, but the answer is far from clear.

"As market dynamics continue to change, Volkswagen is delaying the introduction of the ID.7 sedan in the U.S. and Canada," the automaker said in a statement.

Volkswagen's rollout of ID-badged models in North America has not mirrored other parts of the world, which have already received models like the small ID.3 hatch or the larger ID.6 SUV.

And not only has the ID.7 sedan been on sale in Europe since 2023, but the ID.7 Tourer— never confirmed for North America—has been offered there as well.

VW has also noted that demand for the ID.7 in Europe was higher than expected, especially after the ID. 7 Tourer arrived, pointing to one of the reasons for the sedan's delay in North America.

Five years ago, VW made the choice not to introduce the small ID.3 hatch stateside, for reasons easy to understand at the time. The electric hatchbacks that were offered in the US during the ID.3's launch in Europe were not selling especially well—Americans wanted larger and more luxurious EVs.

It's also worth noting that for all the time the Tesla Model 3 has been on sale, just one automaker has made the decision to challenge it directly, with the Hyundai Ioniq 6 the sole EV sedan to take direct aim at Tesla's popular midsize offering.

The BMW i4, like the Polestar 2, have both been positioned a bit higher in price, while promising luxury rather than premium accommodations inside.

The market dynamics that VW could be referencing may include the general slowdown in EV demand that established EV makers like Tesla, Rivian, and Lucid have already been fighting with heavy price drops, while setting off plenty of alarms in the industry. The post-pandemic rush to buy EVs, at least stateside, appears to be reaching a plateau if not suffering a slump.

But VW won't be without a new EV debut this year.

The ID. Buzz is scheduled to land later this summer, in the process testing out a new electric segment.

There is some level of uncertainty around electric minivans, we should note, which is why no automaker has rushed into this segment besides VW, while Ford's E-Transit passenger van is aimed at a somewhat different segment.

But the ID. Buzz itself won't be a traditional minivan itself, in the sense that it would compete with the Toyota Sienna or the Honda Odyssey.

Rather, it is expected to be more of a roomy premium EV with a price to match—and a cupholder count in the double digits.

Is there room in the market for more competitors to the Tesla Model 3, or are the Tesla Model 3 and the Hyundai Ioniq 6 largely serving the demand that exists at the moment? Let us know what you think in the comments below.