VW To Provide Financial Incentives To Dealers To Push EV Adoption

Volkswagen dealers in the U.S. who prepare their dealerships to sell the brand's coming family of battery-electric vehicles will get a 50 percent match from the factory to build out their facilities — and could qualify for up to 75 percent co-op matches to market them locally — under plans laid out for the brand's dealers Sunday.

Volkswagen of America CEO Scott Keogh detailed the efforts in preparation for the launch of the ID4, a Tiguan-sized BEV crossover that will be imported initially from Germany to the U.S. this year and later built in North America for distribution here.

"We want to make sure dealers are ready for electrification," both in terms of facility readiness and market readiness, Keogh said. "So we are going to financially invest with our dealers to make sure our dealer body is ready."

VW's approximately 650 U.S. dealers will be put into three categories based on their market size and market opportunity to sell BEVs, Keogh said. "We have a varied network, from dealers selling 2,000 cars a year to dealers doing 30,000 or 40,000 cars," he said, adding that the automaker wanted to be "cognizant" of the investment and overhead. "We know that electrification is not going to be 100 percent equal in all markets."

In terms of facility readiness, Keogh said the biggest focus for VW and its dealers will be installation of charging infrastructure and readiness in a dealer's fixed operations to repair and maintain the ID4 and subsequent Volkswagen BEVs. Keogh said the factory will "match the dealers 50 cents to the dollar" on their facility investments to offset their costs to sell BEVs.

To prepare their markets, Keogh said VW will establish a joint marketing fund "intended to do things like dealer events, marketing, traditional marketing — any sort of outreach, anything — because we think a big component of this is to make sure that a dealer is marketing [BEVs] locally, not just on the national stuff that we do," Keogh said. He said the co-op match of local dealer marketing funds could be as high as 75 percent, depending on market opportunities, up to an undisclosed cap for each dealer.

"This is a car that we want to be sold in a very transparent, modern, omnichannel fashion. And we'll make sure our dealers have the tools to do that," Keogh said.

After the meeting, Volkswagen Dealer Advisory Council Chairman John Luciano said response was overwhelmingly positive, and he emphasized that the program is completely voluntary.

"We had so many people that came up and said, 'Wow, I was not in for any of this — zero, not my market not my world.' And now I'm seeing that maybe instead I own that market, because I think everybody else around me" will be too cautious to take a chance on BEVs.

Luciano said he believed perhaps as few as 10 percent of VW dealers nationally would completely sit out, with the rest preparing to retail the ID4 and subsequent BEVs from the brand.

"The big question they're asking is, 'When can I have the car?' And if they didn't care, they just wouldn't be asking that question," he said.

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