Volkswagen ID.Buzz Struggles in US EV Market Due to High Costs and Design Issues

Volkswagen aimed to revive its iconic bus as the electric ID.Buzz to boost its presence in the American auto market, but high prices, production delays, and regulatory hurdles have limited its success. The vehicle, which draws on nostalgia from the 1960s counterculture era, arrived late and faced immediate challenges, including a recall that halted sales for two months. According to a report from The Wall Street Journal, these issues highlight broader problems for the German automaker in adapting to U.S. consumer needs.

Revival of an Iconic Design

Volkswagen executives saw the ID.Buzz as a chance to recapture the appeal of the original bus, which sold millions and symbolized affordable, fun transportation. The company unveiled concepts starting in 2001, but progress stalled until the 2015 emissions scandal pushed leaders to focus on electric models.

In 2016, executive Herbert Diess introduced a concept at the Consumer Electronics Show, asking, “Do you remember this iconic machine?” before revealing the Budd-e and calling it a “journey to the year 2019.” By 2017, Diess promised the ID.Buzz would be “affordable for millions, not just to millionaires,” with deliveries starting in 2022.

The design keeps the boxy shape and two-tone paint of the classic bus, but as an EV, it prioritizes aerodynamics. Engineers sloped the front more than the original to reduce drag, yet the vehicle still requires a large battery for its size. This results in a range of 234 miles per charge, which falls short compared to many competitors that offer over 300 miles.

Production and Launch Delays

Internal divisions at Volkswagen slowed development. The company assigned the project to its commercial-vehicle division in Hanover, Germany, despite suggestions to build it in the U.S. A former executive involved noted that “Herbert’s plans to take the bus out of Hanover and put it in another country didn’t go down well with Lower Saxony,” the region with a 20% stake in Volkswagen. This choice raised costs, as labor in Germany runs about $3,307 per vehicle, compared to $1,341 in the U.S.

The commercial team lacked deep EV expertise, leading to delays. A former North American executive reportedly explained, “Commercial-vehicle engineers had to learn a lot of things, and the other engineers said, ‘We’re too busy, you figure it out yourself.’”

Supply chain issues during the pandemic increased battery expenses, forcing cuts like replacing soft interior materials with cheaper plastics. The U.S. version, a three-row extended model, launched in Europe in 2022 but only reached American dealers in late 2024.

At the 2023 U.S. unveiling, executive Thomas Schäfer declared, “Finally, finally,” as the ID.Buzz appeared on stage. However, Kjell Gruner, president of Volkswagen Group of America, later admitted, “Could have been there earlier? Probably, yes.”

Market Challenges and Consumer Response

The ID.Buzz starts at around $60,000, which has deterred buyers amid a slowdown in EV demand. Dealer Fred Emich IV stated, “Anyone who has been around VW thinks the price point is high.”

Enthusiast Autrey McVicker, who wanted a $72,000 version, said, “I just couldn’t justify such a high expense for an EV that would most likely lose 50% of its value the first year.” He plans to wait for used models.

Trade policies under President Trump added pressure, with a 25% tariff on imported cars and reduced EV incentives. Design oversights led to recalls: one for incorrect brake warning lights and another in April because the third-row seat allowed three passengers but provided only two seat belts. Volkswagen fixed this by adding plastic covers, affecting about 5,600 vehicles and suspending sales for two months. By June’s end, the company delivered just 564 units in the prior three months, with over 3,000 shipped to dealers by March.

A Volkswagen spokesman described the ID.Buzz as a “halo” product meant to attract showroom visitors rather than high-volume sales. Analyst Harald Hendrikse from Citigroup noted, “The problem with all of the Volkswagen brands has always been that they’ve just been a bit too Europe-centric.”

Looking Ahead for Volkswagen in the US

These setbacks reflect Volkswagen’s ongoing struggles with U.S.-specific needs, such as extra cupholders added at ports. The company now focuses on models like the Scout SUV, built in a new South Carolina factory.

CEO Oliver Blume announced in May that Volkswagen is “formulating a vision for North America,” aiming to grow “with products that are consistently geared to the expectations of American customers.”

Despite the nostalgia, the ID.Buzz’s high cost and limited range challenge its role in the competitive EV landscape, where affordability and practicality drive adoption. Volkswagen sold about 30,000 units globally last year, far below the Hanover plant’s 130,000-unit capacity, as subsidies declined in markets like Germany and Sweden.

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