Volkswagen has scrapped its plans to launch the ID.7 sedan in the U.S. and Canada, marking another setback in the automaker’s EV strategy amid shifting market conditions and policy uncertainty.
The decision was confirmed by The Car Guide, citing Volkswagen Canada’s head of communications, as well as Automotive News, which quoted a company spokesperson attributing the move to “the ongoing challenging EV climate.”
The ID.7 was initially slated for a Q3 2024 release but had been delayed last May as Volkswagen reevaluated its market approach.
The cancellation reflects broader challenges facing the North American EV market, which has been impacted by fluctuating consumer demand, high production costs and policy shifts affecting incentives.
Notably, the uncertainty surrounding EV subsidies in the U.S., particularly in light of President Donald Trump’s re-election campaign, has created additional headwinds. The potential rollback of incentives from the Inflation Reduction Act, coupled with the possibility of new tariffs, could significantly impact EV pricing, making high-cost models like the ID.7 -- expected to start at over $50,000 -- a tougher sell.
Market trends also played a role in the ID.7’s demise. The U.S. car market has increasingly favored crossovers and SUVs over sedans, making it difficult for a traditional four-door EV to gain traction. Volkswagen dealers had reportedly raised concerns over the ID.7’s positioning, noting its limited appeal compared to more popular crossover EV options.
The decision raises questions about Volkswagen’s long-term EV strategy in North America. While the ID. Buzz has generated interest, its range and pricing have drawn criticism. Meanwhile, Volkswagen’s partnership with Rivian and future projects like Project Trinity could signal a shift in its approach. For now, however, the ID.7 remains a European exclusive, leaving North American consumers without a direct electric successor to the Passat.
