Volkswagen Said To Slash ID.3 Prices To Take On Tesla Model Y

German automaker Volkswagen VWAGY will slash the price of its ID.3 electric hatchback by €3,000.

What Happened: Volkswagen will lower the price of the ID.3 under €40,000 or $42,000.

"The ID.3 Pro, which has a 58 kWh battery and 150 kW output, will be available in Germany from 39,995 euros (incl. 19 percent VAT). Advance sales are expected to start at the end of March," Volkswagen told Benzinga in a statement.

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With the price drop, the car would be cheaper than Tesla Inc‘s TSLA Model Y Long Range which starts in Europe at €54,990, stated a report in Teslarati.

"The new ID.3 will be on sale at the end of the month in Germany and at the beginning of April for most other European countries," a company spokesperson told Benzinga.

Two and a half years after the launch of the first generation, Volkswagen launched the new ID.3 earlier this month. The new ID.3, more mature given its new ID software, is in the starting blocks, Volkswagen says on its website. The “near-production concept car” has full connectivity and state-of-the-art software, Volkswagen said on Twitter.

After Tesla slashed prices of its entire lineup in the US in January with reductions ranging from 6.4% to 19.7%, several other EV makers including Ford Motor Co F followed suit. However, Volkswagen Group CEO Oliver Blume told a German newspaper in late January that the company had no plans to slash prices, reported Electrek.

Tesla, however, slashed prices again last week. Updated price information on Tesla's website showed price reductions in the range of 4.4%-9.1% for the Model X crossover SUV and the Model S liftback sedan in the U.S.

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