How Volkswagen's Electric Bus Lost Its Charge

Speaker 1 Our first annual International Volkswagen Bus Day is officially on.

Speaker 3 It was 2023 and Volkswagen was holding an event in Huntington Beach, California to celebrate the iconic VW bus.

Speaker 2 Love for the bus. I don't know how a vehicle...

Speaker 2 Even if you don't know what the Volkswagen bus is, if you saw one on the road, you would instantly recognize it.

Speaker 3 That's our colleague, Sean McClain. He's covered the auto industry and is very familiar with the iconic bus.

Speaker 2 So it is this boxy, flat-faced with a giant VW circle logo on the front. It's got these glass roof, you know, windows, and a two-tone paint job.

Speaker 3 The bus has had a cult-like following for decades, especially with surfers and and hippies. And at that event, hundreds of fans had gathered with their classic buses parked on the beach.

Speaker 2 It was probably about 200 vintage 1960s Volkswagen buses, all restored to original condition, bright reds, yellows, oranges. And all the enthusiasts gathered out in a parking lot having coffee.

Speaker 3 They were there to hear a major announcement from Volkswagen. The bus was coming back, but with a modern twist.

Speaker 2 Volkswagen of America is introducing the North American version of our first all-electric bus. And we'll also be selling Judge.

Speaker 2 Finally, finally.

Speaker 2 It was the Volkswagen ID Buzz, which is a

Speaker 2 reincarnation of the original bus in EV form.

Speaker 3 The ID Buzz. It seemed like the perfect fit for Volkswagen, a car that would capture the hearts of die-hard fans and new EV enthusiasts.

Speaker 3 So there's a ton of anticipation for this car.

Speaker 2 How did the rollout end up going? On paper, the ID Buzz should have been a runaway success, right?

Speaker 2 You had one of the most iconic vehicles in history. You had a group of people who owned one 30, 40 years ago and now have money to spend on the new one.

Speaker 2 So there should have been a ready lineup of people wanting to buy this vehicle. But it's been an utter disappointment.
It's been a bong.

Speaker 2 The ID buzz symbolizes the struggles that car makers have had with selling electric vehicles to the American public.

Speaker 3 Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza.
It's Tuesday, July 29th.

Speaker 3 Coming up on the show, how the buzz around the new VW bus lost its charge.

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Speaker 3 The VW bus, officially the Type 2 Transporter, was first released in 1950.

Speaker 2 If you've seen photos of Woodstock, if you've seen photos of your grandpa and grandma, you know, chances are you've seen this thing on the road or in photos.

Speaker 3 The car was popular because it was cheap, the equivalent of about $20,000 today.

Speaker 3 And you could fit a lot of people in it.

Speaker 2 Yet it holds one,

Speaker 2 two, three,

Speaker 2 four,

Speaker 2 five, six, seven, eight,

Speaker 2 nine, including bag and baggage.

Speaker 3 You could take it on road trips, camp with it, or pile a bunch of people in and go to a Grateful Dead concert.

Speaker 3 And it became a fixture of pop culture, appearing in films like Almost Famous and the animated movie Cars, where the bus was a hippie named Fillmore.

Speaker 2 I'm telling you, man,

Speaker 2 every third blink is slower.

Speaker 2 Well, look, if it shows up in the movie Cars, you know it's an iconic vehicle.

Speaker 3 That's the standard.

Speaker 2 It was just this great car that almost defined a generation in the late 60s.

Speaker 3 But even the most beloved cars are phased out eventually, and Volkswagen stopped selling the bus in the U.S.

Speaker 3 So what changed for Volkswagen? Why did it decide to remake the bus?

Speaker 2 What pushed Volkswagen to finally, finally decide to do this was the greatest scandal in its history. And I don't know if folks remember Dieselgate.

Speaker 3 Dieselgate, the Volkswagen emissions scandal. In 2015, the company admitted to cheating on emissions tests, a big deal for a company that was then marketing its cars as environmentally friendly.

Speaker 2 And the discovery of this led to massive fines,

Speaker 2 huge recalls, and having to buy back owners' vehicles, but also a huge reputation blow to Volkswagen.

Speaker 3 At the time, a company executive said that they needed to earn back Americans' trust, adding that Volkswagen was, quote, focused on resolving the outstanding issues and building a better company.

Speaker 2 But the stench of the Dieselgate scandal was really hurting Volkswagen sales, and there was a Volkswagen executive named Herbert Dees,

Speaker 2 who was one of the early group of automotive executives. who thought that electric vehicles were going to take over the global auto market.

Speaker 2 And so Herbert Dies thought that not only did Volkswagen need electric vehicles, it thought a vehicle like the Volkswagen bus would be perfect for overhauling Volkswagen's image.

Speaker 3 This was in 2016, when the EV market was just starting to take off. At the head of the pack was Tesla.

Speaker 3 The company's flagship EV, the Model S, was cool and sporty, and it seemed to mark the beginning of a new era for the car industry.

Speaker 2 What folks had seen with the Model S is that, you know, an electric vehicle didn't have to be boring. It didn't have to be a battery-powered golf cart.

Speaker 2 So Volkswagen really was one of the fastest to pivot and try to capture some of the

Speaker 2 magic and excitement that Elon Musk was generating. And really,

Speaker 2 there was a sense that electric vehicles were not only here,

Speaker 2 but were going to quickly spread throughout America and the rest of the world.

Speaker 3 So the idea for a relaunch of the bus goes back to 2016, but that launch you described didn't happen, like you said, till 2023. And it didn't hit American roads until 2024.
Why did it take so long?

Speaker 2 Yeah, so this is where the story takes a bit of a turn and becomes, you know, it's an EV story, but at the end of the day, it's a holy moly, Volkswagen is a mess story.

Speaker 3 The problem started with the production of the vehicle. The team that Volkswagen tapped to make the the ID Buzz was the arm of the company that produced the original bus.

Speaker 3 But that team makes commercial vehicles, like delivery vans and corporate fleet cars. It doesn't normally make cars for everyday drivers or produce cars for the U.S.
market.

Speaker 2 And that was

Speaker 2 one of the strange aspects of Volkswagen's decision-making on the ID Buzz. Why would you give this iconic vehicle that's supposed to be a flagship and hopefully a hot seller in the U.S.

Speaker 2 to a company that doesn't make vehicles for the U.S.

Speaker 3 A Volkswagen spokesman said the factories run by the commercial vehicle business were the only ones with the right equipment to build the ID buzz.

Speaker 3 But when the commercial vehicles engineers ran into trouble on production of the car, it was hard for them to get help.

Speaker 3 And that's partially because of the way the company is structured. Volkswagen is part of the Volkswagen Group, which runs Porsche and Audi.

Speaker 2 And each of these brands compete with one another for RD dollars, for engineering cash, for production volume, for a lot of the technical design that goes to sort of underpin many different models.

Speaker 2 In the course of reporting, we heard a lot of folks who were telling us that because of the internal competition, they weren't getting a lot of help from the other various arms of the company.

Speaker 2 As one former executive told me,

Speaker 2 they would go to, I don't know, Audi engineer and say, hey, I need to learn how to do this. And they would say, we're too busy figuring it out yourself.

Speaker 3 In the end, it took nearly a decade for buyers to get their hands on the ID buzz.

Speaker 2 The car industry is notoriously slow when it comes to coming out with new models. You know, it can cost billions and can take three to five years.

Speaker 2 And the fact that it took 10 years really sort of underlines how much from scratch these engineers had to start.

Speaker 3 The years-long delay hurt Volkswagen. While it was struggling to build the ID buzz, the EV industry boomed.
Tesla released more models. Legacy U.S.

Speaker 3 car companies like Ford and Cadillac made their own EVs. And hot startups like Rivian and Lucid broke into the market.

Speaker 2 Volkswagen managed to sort of miss the crest of the wave that it hoped to ride.

Speaker 2 But then also managed to have the worst timing in the world where it lands on dealer lots in the U.S.

Speaker 2 right around the time that Donald Trump gets elected for the second time and promises to remove all of the incentives and tax credits for EVs that were driving the market.

Speaker 2 So it not only missed the good times, it landed in the midst of the bad times.

Speaker 3 Like you couldn't have picked a worse moment for them to have launched this particular vehicle.

Speaker 2 You could not have picked a worse moment to launch this vehicle.

Speaker 3 And the problems were just beginning.

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Speaker 3 When the ID Buzz was finally released in the U.S. in 2024, it looked like the modern successor of the original bus.

Speaker 3 It's long, rectangular, has many windows, and keeps a flat face like its predecessor. But the ID Buzz is much bigger and comes with a ton of modern tech.

Speaker 3 What was the reaction to this car, especially from those die-hard fans that they were really hoping to like get excited?

Speaker 2 Well, if you can imagine being a avid bus fan standing outside that stage in Huntington Beach in June 2023 and seeing this thing roll out

Speaker 2 and then

Speaker 2 two years later, see it arrive on your doorstep and there are two big problems with it. One,

Speaker 2 it costs at minimum $60,000. And if you want the cool two-tone pink color that's closer to seventy

Speaker 2 and you're talking luxury vehicle prices which is again

Speaker 2 volkswagen bus was supposed to be cheap transportation for the masses sixty to seventy thousand dollars is very squarely in mercedes-benz territory not volkswagen territory the other issue the range

Speaker 3 Today, the average range for an EV is about 300 miles per charge. But because of its bulky shape and size, the ID Buzz isn't very aerodynamic.
It needs a lot more power to move.

Speaker 3 So it maxes out at 234 miles per charge.

Speaker 2 It's not very far. I mean,

Speaker 2 it's not unheard of for folks to have to drive three, 400 miles to go on vacation on a road trip.

Speaker 2 And sure, you know, you may not do that every day, but you do it with enough regularity that becomes a problem. And especially for a vehicle like the ID Buzz, which was the road trip vehicle.

Speaker 3 Right. That was sort of the personality of it.

Speaker 2 Right.

Speaker 2 So most folks that I've talked to who were excited for this vehicle and either still bought it or decided not to buy it, you know, were sorely disappointed by both the price and the range.

Speaker 2 I think they felt really let down by the company.

Speaker 3 The ID Buzz had other problems, too.

Speaker 2 One of the things that really underlined how little Volkswagen was paying attention to what American car buyers wanted or what they needed or what it took to sell a vehicle in in the U.S., is they had two fairly glaring recalls for almost humorous oversights of U.S.

Speaker 2 standards.

Speaker 3 For one thing, the buzz has an expansive back row that could fit three people, but there were only two seatbelts. And the brake warning sign on the dash was the wrong symbol.

Speaker 3 These mistakes forced Volkswagen to recall the buzz twice.

Speaker 3 In addition to those regulatory issues, there were also other misses for U.S. customers, like the fact that the ID Buzz didn't have a single cup holder in the second row.

Speaker 2 I think this is the perennial problem for a company like Volkswagen, where it can't quite decide what it wants to be to Americans. So in America, what do we buy?

Speaker 2 We buy two or three row SUVs and pickup trucks.

Speaker 3 We have cup holders.

Speaker 2 We have cup holders. It's funny, like you cover enough car launches in the U.S.

Speaker 2 And a lot of times a car maker will list the number of cup holders it has in the vehicle and the ID buzz didn't even have cup holders in the second row.

Speaker 3 Where are people going to put their drive-through cups, their Stanley cups? Like,

Speaker 2 how do you go on a road trip without them? Where are you going to put your big gulps? You know,

Speaker 2 you can't just hold it in your lap. Nonsense.

Speaker 3 Was there anything that people liked about the ID Buzz?

Speaker 2 People love the color tone. You know, you've got colors like Pomelo Yellow and Candy White and Cabana Blue.
And, you know, it just sort of screams, you know, sort of road trip. Yeah, summer

Speaker 3 school, like hippie vibes.

Speaker 2 Absolutely.

Speaker 2 So they love that. I mean, they love the amount of storage in the thing.
I mean, the thing looks like a loaf of bread and it's just vast and empty on the inside with tons of cover space.

Speaker 3 So how is it done sales-wise in the U.S.?

Speaker 2 It would be fair to say that sales have been underwhelming.

Speaker 2 They've sort of haven't even cracked 5,000 yet since the launch, you know, since it went on sale, which, you know, for a $70,000 vehicle is, you know, especially an EV,

Speaker 2 it's not the worst in the world, not the worst I've heard, but it's certainly not great.

Speaker 2 And certainly not something that they hoped would be, you know, sort of an iconic rebirth of a vehicle that sold in the millions.

Speaker 3 Has VW said anything about that sales performance?

Speaker 2 Yeah, Volkswagen says that they never intended to sell hundreds of thousands or millions of these things.

Speaker 2 They say it's a flagship vehicle that's sort of designed to bring people into the dealerships and say, okay, Volkswagen's a cool company.

Speaker 3 So how does the disappointment for the company of the ID buzz hurt Volkswagen, whether it's from a financial or from a brand perspective?

Speaker 2 Well, Volkswagen has sort of lost market share since the bus and the Beatles stopped selling in the U.S. and have been trying to recapture that ever since and keep going back to the drawing board.

Speaker 2 So they launch a vehicle, it does poorly, they recalibrate. They launch a vehicle, it does poorly, they recalibrate.
They can't really seem to stick to a strategy.

Speaker 2 And so the ID buzz was supposed to help Volkswagen plant a flag on the U.S. automotive market and say, we're cool again.

Speaker 2 That Volkswagen, you remember from your grandfather's generation, that's us again, except we're electric. Right.

Speaker 3 We're back and we're better.

Speaker 2 We're back and we're better. And the fact that it failed has sent them back to the drawing board.

Speaker 2 The Volkswagen ID Buzz is a great parable for the auto industry today and the EV industry.

Speaker 2 You just had a host of vehicles come out over the last 10 years that were playing on the nostalgia and the heritage of all these brands.

Speaker 2 You know, your pickup trucks, your SUVs, and your Volkswagen van. You have the Ford Lightning, which is, you know, the electric version of the F-150, the best-selling vehicle in America.

Speaker 2 You have the Mach E.

Speaker 2 You have a a number of other vehicles like this that have just not performed in the marketplace the way that many thought, including many car executives, thought it would be.

Speaker 2 And

Speaker 2 that really hasn't moved the needle on the EV market in the U.S.

Speaker 2 But it's pretty clear they can't just keep going to the well and slapping batteries on the vehicles that we used to buy in the 70s, 80s, and 90s even.

Speaker 2 They're going to have to come up with something fresh and new. And that's proving to be a struggle for them.
And Volkswagen, you know, just happened to struggle more than most.

Speaker 3 That's all for today, Tuesday, July 29th. The journal is a co-production of Spotify and the Wall Street Journal.
Additional recording in this episode by Stephen Wilmot.

Speaker 3 Thanks for listening. See you tomorrow.