'It's not just a product for us': Volkswagen shrugs off electric car sales plateau, saying the EV early adopter phase is over in Australia as ID.4 and ID.5 land to rival Tesla Model Y and Kia EV5

Volkswagen has shrugged off an EV sales slow-down in the first quarter of the year in Australia, claiming 2025 was the beginning of what it considers to be the mainstream adoption phase for electric cars.

At the launch of the ID.4 and ID.5 mid-size electric cars, the brand’s Director of Passenger Cars, Piergiorgio Minto, projected a steady climb for electric vehicle sales, despite the current slow-down, telling CarsGuide how the brand had come to this conclusion.

“There was a little bit of a slow-down in the medium SUV segment, but, in total, the EV market is not in a slowdown.” he said.

“There are a lot of independent companies which are looking at these market trends and patterns. We’ve seen them in Europe - early adopters are only around 14 per cent of the market - and we will always have some people who will never jump to it - but once you get to 55 per cent and over, there’s a percentage of the remainder who won’t jump unless they are somehow forced to.”

Minto likened the current transition towards electric power to a similar trend when diesel engines were introduced for passenger cars in Europe.

“It happened to diesel engines in Europe [...] in the 80s it came to the passenger car market and people said ‘we’ll never develop this further’, then suddenly in Europe by 2010 or 2012 there were more diesel passenger cars than petrol ones," he said.

“So it’s always a game between demand, offers, regulation, and a little bit of a trend as well.”

For reference, Minto is correct. By 2012 diesel vehicles accounted for 55 per cent of sales in Europe, while petrol accounted for 44 per cent. This is partially due to the fact that EU regulations at the time were focused more heavily on CO2, which diesel vehicles generally produce less of, and had not yet targeted the also-harmful NOx emissions which they produce more of. These became the target of later stages of the EU emissions regime.

Regardless, by the 2010s, European consumers had also realised the fuel efficiency benefits of diesel engines.

Volkswagen believes a similar trend will follow as EVs enter the mainstream, as buyers begin to understand the cost benefits once better options are available to them.

Arjun Nidigallu, VW’s Product Manager for the ID range explained how VW’s approach was to focus on the mainstream audience by converting internal combustion engine (ICE) buyers rather than just early adopters.

“EV manufacturers have focused on innovation and focused on pricing, making those products more affordable, but where they really haven’t focused yet is on how they can replace your ICE car in a realistic way. That simply hasn’t been done properly by most manufacturers, and that’s really the difference between what we’re doing now and the early adopter phase.” he said.

“The trend is not really negative, and once you break that psychological barrier of 500km [driving range] it’s a different ballpark. It’s no longer seen as a battery electric vehicle, it’s simply seen as a powertrain option. It has its own benefits.”

Australia’s New Vehicle Efficiency Standard (NVES), which imposes increasingly harsh Euro-style C02 limits on manufacturers from 2025 to 2030, will also have a big impact on pushing the Australian car market down this post-early-adopter path, according to Minto.

“It was 12 per cent EV last year, I think it will continue to steadily grow - the NVES, whether we want it to or not, will play a role - all the manufacturers will align and follow the NVES path. We’re going to open up our product line to more electric vehicles, and there will be many more options on the market. After this ‘early adopter’ phase, many more customers will jump in on this.” he continued.

“When the market hits 35 or 40 per cent is hard to say, but it won’t stay at 12 per cent. I would compare it to some markets in Europe where they tried to move more toward electric - Denmark, Norway, and Sweden. They are quite keen and into alternative powertrains, but they also had very clear targets for C02 and emissions.

“We have a global strategy heading toward neutrality - it’s not just a ‘product’ for us.”

Yet still, Volkswagen is only just dipping its toes in the water with EVs. It launches in Australia with the ID.4 and ID.5 in a single spec level (ID.4 Pro, from $59,990, and ID.5 GTX from $72,990), with two more variants on the way, as it strategically prices its initial offerings at a similar level to coax existing buyers who may have otherwise opted for its most popular Tiguan variant (162TSI R-Line).

The brand says this is about offering its customers a wider choice as it also looks to introduce mild hybrid and plug-in hybrid (PHEV) powertrains in its next-generation Tiguan, but it stopped short of confirming other VE EVs which have been delayed for an Australian arrival.

For example, VW maintains it won't bring in the ID.3 hatchback despite receiving similar updates to the ID.4 and 5 which make them “more suited to Australian conditions”.

The company also wasn’t looking at replacing the now-discontinued Passat with the ID.7, which is available in Europe.

Instead, as a group, VW has spread its electric SUV offering far and wide, from the ID.4 to the Cupra Tavascan, Skoda Elroq, and Audi Q4 e-tron, seemingly in an attempt to capture a wide audience for cars built on the same platform at multiple price points.

Whether this limited per-brand approach works in light of an expansive range of electric options from Chinese rivals like BYD, but also more traditional opponents such as Kia with its expanding range of electric offerings, remains to be seen.