It’s not just electric cars that are overpriced

‘Affordability’ was the word I probably used more than any other last year. And I make no apologies for that, because no matter how strong a new car is in terms of build quality, safety, efficiency and driver/passenger appeal, it’ll fall at the first hurdle if it’s overpriced and therefore beyond the financial reach of the consumers it was designed for.

Such a vehicle, dogged by an ill-thought-out, inappropriately high price tag, doesn’t face anything as dramatic as a sudden-death withdrawal from the market where – surprise, surprise – it failed to attract enough orders from potential buyers. Instead, the model’s RRP has to be significantly and embarrassingly reduced. This discredits the manufacturer for initially getting its pricing policy so wrong. And such self-inflicted shenanigans distort and confuse resale values. Also, none of the above does much to improve the attractiveness and credibility of the model in question. What a mess.

So, I’m delighted that affordability has just become the word of the week for the motor industry at home and abroad. A few days ago, Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, insisted that in the electric car market, “affordability remains a major barrier to uptake”. I’d go further still and argue it’s one of the top three barriers, right up there with a still-inadequate charging infrastructure and range anxiety. What’s more, affordability (or the lack of it) is not just an EV issue. It’s a headache, too, for many buyers of new hybrid, petrol or diesel models.

At the same time as the SMMT’s welcome war cry on the affordability front, Volkswagen formally announced last week that its trusty Polo has just been awarded the official Best Car of the Half Century title as part of the Best Cars of the Year awards, not least because the supermini has, from 1975 to 2025, consistently offered “affordable mobility for all”, according to the company.

And with accessible future products very much on his mind, Volkswagen’s global chief, CEO Thomas Schäfer, went further still by adding that his ID.1 all-electric sub-supermini for 2027 will be “affordable, high quality and profitable”, with a price tag of just under £17,000 (at today’s prices). That puts the imminent Volkswagen in the same price league as the basic, humble Dacia Spring (from £14,995).

This, to me, is an acknowledgement from Schäfer and his team that some of his previous ID products have hardly had affordability written all over them. They therefore required and received straightforward price cuts or lower-priced entry models (or both). Put another way, VW now knows that the long-term durability and borderline premium build quality of its cars mean nothing if those cars aren’t priced right.

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