Volkswagen delays electric sedan launch in US, Canada citing ‘market dynamics’ as EV demand wanes

After a splashy New York City debut just one year ago, Volkswagen (VWAGY) is pushing back plans to bring its ID.7 EV sedan to the US and Canada.

The German automaker said on Wednesday that the ID.7 — which has been on sale in Europe and China since late 2023 — is now delayed in the US and Canada, citing changing “market dynamics.”

Namely: waning EV demand and the decline of the sedan in America.

Last month, KBB reported EV sales rose only 2.6% year over year in the first quarter of 2024 compared to 15.2% in the fourth quarter of 2023 and 46.4% growth in the first quarter last year.

In addition to slowing demand for EVs, the sedan body style has been losing popularity in the US for some time now. Earlier this month, Chevy decided to cancel its Malibu sedan after 50 years and 10 million cars sold to focus on SUVs, crossovers, and EVs.

A year ago, Volkswagen Americas president and CEO Pablo Di Si was bullish on the ID.7’s prospects in the US.

“Our focus continues to be SUVs, but obviously the sedan market represents 16% of the total market in the US … and bringing the ID.7 with its all-new leather premium interior, 300 [mile] plus range in 2024, it is the right approach to take for VW,” he said at the ID.7’s April 2023 debut.

However, Volkswagen of America’s pivot on the ID.7 comes as its parent company also tempers plans that once saw it set to launch 75 EVs over the next decade, including 25 in North America.

A Volkswagen spokesperson told Yahoo Finance on Wednesday that bringing 25 EV models to North America by 2030 is “still the plan.”

But earlier this month, Volkswagen Passenger Cars CEO Thomas Schäfer indicated a product portfolio shift was needed. Customers “want plug-in hybrids now, including in China and the US,” Schäfer said in an interview at a conference in London, Bloomberg reported.

Volkswagen has plug-in hybrid versions of the Passat sedan and Tiguan SUV in Europe, but does not currently have any hybrids in the US.

The German automaker has also recently taken advantage of partnerships to lower costs and time to market for its EVs, primarily focused on China. VW said it would partner with China’s XPeng to produce two new EVs with Volkswagen branding, powered by XPeng’s software and EV engineering.

Earlier this week, Volkswagen’s premium brand Audi announced it had signed a deal with China’s state-owned SAIC to develop new EVs for the mainland.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance