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Volkswagen's software issues with the ID.3 are worse than reported: 'It is an absolute disaster'
The software issues plaguing the Volkswagen ID.3 have been reported for some time, but new details from insiders at the German automaker have hinted that the all-electric hatchback’s problems may be worse than initially reported. The update comes amidst a confirmation of the ID.3’s software challenges by a VW spokesperson.
Local media reports have indicated that Volkswagen will likely only release a toned-down version of the ID.3 at first due to the ongoing problems with the vehicle’s software. Thus, Volkswagen will probably still stick with its long-communicated delivery schedule this summer, as noted by CEO Herbert Diess while presenting annual figures last week. To accomplish this, “one or the other planned function” of the ID.3 will reportedly be canceled, and later delivered through an update.
These details were confirmed by a Volkswagen spokesperson, who addressed the topic in a statement to news outlet sueddeutsche.de. “Things are not going great,” the spokesperson said. Insiders quoted by the publication painted a much graver picture. “It is no longer a laughing matter,” the insiders noted.
The publication’s sources indicated that the ID.3 is far from being ready for the market and that Volkswagen is “not even close to an industrial production process at ID.3.” As for the vehicles that will reportedly be delivered this coming summer, the insiders related that they would be tasked to “tinker them by hand so that something is there.” This does not have anything to do with series production, though.
An internal source from Volkswagen explained that ID.3’s software issues were mostly due to a lack of qualified personnel. But apart from the lack of programmers and vehicle software specialists, key individuals have also been departing from VW. Among these is Martin Hoffman, the CIO responsible for Volkswagen’s IT division, who will be leaving the automaker at the end of this month. “It’s an absolute disaster. We just can’t get the people,” the insiders said.
Amidst these issues, Volkswagen is reportedly tagging in an unlikely ally to help prepare the ID.3 for production. This ally would be Daimler, which is already in talks with BMW for joint software development. A small meeting between some of Volkswagen and Daimler’s key executives was reportedly held recently, and it was discussed how the two automakers could collaborate to develop an operating system for cars. Such a deal would likely put Daimler in a tricky situation, as cooperation among Germany’s three top automakers is very unlikely.
Overall, it appears that the importance of in-vehicle software is becoming more and more evident among Germany’s automakers, and it seems that Volkswagen would do what it can to make sure that it can at least reduce the lead currently enjoyed by Tesla. The American electric car maker had shunned existing supply chains when it was developing its electric cars’ software, developing its in-vehicle systems from scratch. Unlike traditional automakers, Tesla’s software runs on a central control unit, giving it a much more efficient structure that is optimized for software updates and maintenance.
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Tesla Model 3 and Model Y dominates U.S. EV market in 2025
The figures were detailed in Kelley Blue Book’s Q4 2025 U.S. Electric Vehicle Sales Report.
Tesla’s Model 3 and Model Y continued to overwhelmingly dominate the United States’ electric vehicle market in 2025. New sales data showed that Tesla’s two mass market cars maintained a commanding segment share, with the Model 3 posting year-to-date growth and the Model Y remaining resilient despite factory shutdowns tied to its refresh.
The figures were detailed in Kelley Blue Book’s Q4 2025 U.S. Electric Vehicle Sales Report.
Model 3 and Model Y are still dominant
According to the report, Tesla delivered an estimated 192,440 Model 3 sedans in the United States in 2025, representing a 1.3% year-to-date increase compared to 2024. The Model 3 alone accounted for 15.9% of all U.S. EV sales, making it one of the highest-volume electric vehicles in the country.
The Model Y was even more dominant. U.S. deliveries of the all-electric crossover reached 357,528 units in 2025, a 4.0% year-to-date decline from the prior year. It should be noted, however, that the drop came during a year that included production shutdowns at Tesla’s Fremont Factory and Gigafactory Texas as the company transitioned to the new Model Y. Even with those disruptions, the Model Y captured an overwhelming 39.5% share of the market, far surpassing any single competitor.
Combined, the Model 3 and Model Y represented more than half of all EVs sold in the United States during 2025, highlighting Tesla’s iron grip on the country’s mass-market EV segment.
Tesla’s challenges in 2025
Tesla’s sustained performance came amid a year of elevated public and political controversy surrounding Elon Musk, whose political activities in the first half of the year ended up fueling a narrative that the CEO’s actions are damaging the automaker’s consumer appeal. However, U.S. sales data suggest that demand for Tesla’s core vehicles has remained remarkably resilient.
Based on Kelley Blue Book’s Q4 2025 U.S. Electric Vehicle Sales Report, Tesla’s most expensive offerings such as the Tesla Cybertruck, Model S, and Model X, all saw steep declines in 2025. This suggests that mainstream EV buyers might have had a price issue with Tesla’s more expensive offerings, not an Elon Musk issue.
Ultimately, despite broader EV market softness, with total U.S. EV sales slipping about 2% year-to-date, Tesla still accounted for 58.9% of all EV deliveries in 2025, according to the report. This means that out of every ten EVs sold in the United States in 2025, more than half of them were Teslas.
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Tesla Model 3 and Model Y earn Euro NCAP Best in Class safety awards
“The company’s best-selling Model Y proved the gold standard for small SUVs,” Euro NCAP noted.
Tesla won dual categories in the Euro NCAP Best in Class awards, with the Model 3 being named the safest Large Family Car and the Model Y being recognized as the safest Small SUV.
The feat was highlighted by Tesla Europe & Middle East in a post on its official account on social media platform X.
Model 3 and Model Y lead their respective segments
As per a press release from the Euro NCAP, the organization’s Best in Class designation is based on a weighted assessment of four key areas: Adult Occupant, Child Occupant, Vulnerable Road User, and Safety Assist. Only vehicles that achieved a 5-star Euro NCAP rating and were evaluated with standard safety equipment are eligible for the award.
Euro NCAP noted that the updated Tesla Model 3 performed particularly well in Child Occupant protection, while its Safety Assist score reflected Tesla’s ongoing improvements to driver-assistance systems. The Model Y similarly stood out in Child Occupant protection and Safety Assist, reinforcing Tesla’s dual-category win.
“The company’s best-selling Model Y proved the gold standard for small SUVs,” Euro NCAP noted.
Euro NCAP leadership shares insights
Euro NCAP Secretary General Dr. Michiel van Ratingen said the organization’s Best in Class awards are designed to help consumers identify the safest vehicles over the past year.
Van Ratingen noted that 2025 was Euro NCAP’s busiest year to date, with more vehicles tested than ever before, amid a growing variety of electric cars and increasingly sophisticated safety systems. While the Mercedes-Benz CLA ultimately earned the title of Best Performer of 2025, he emphasized that Tesla finished only fractionally behind in the overall rankings.
“It was a close-run competition,” van Ratingen said. “Tesla was only fractionally behind, and new entrants like firefly and Leapmotor show how global competition continues to grow, which can only be a good thing for consumers who value safety as much as style, practicality, driving performance, and running costs from their next car.”
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Tesla is shifting FSD to a subscription-only model, confirms Elon Musk
Tesla CEO Elon Musk confirmed the upcoming update in a post on social media platform X.
Tesla will be ending one-time purchases of its Full Self-Driving (FSD) system after Valentine’s Day, transitioning the feature to a monthly subscription-only model.
Tesla CEO Elon Musk confirmed the upcoming update in a post on social media platform X.
No more FSD one-time purchases
As per Elon Musk in his post on X, “Tesla will stop selling FSD after Feb 14. FSD will only be available as a monthly subscription thereafter.” This marks a shift in how Tesla monetizes its FSD system, which can now be purchased for a one-time fee or accessed through a monthly subscription.
FSD’s subscription model has been $99 per month in the United States, while its one-time purchase option is currently priced at $8,000. FSD’s one-time purchase price has swung wildly in recent years, reaching $15,000 in September 2022. At the time, FSD was proficient, but its performance was not on par with v14. This made its $15,000 upfront price a hard sell for consumers.
Tesla’s move to a subscription-only model could then streamline how the company sells FSD. It also lowers the entry price for the system, as even price-conscious drivers would likely be able to justify FSD’s $99 monthly subscription cost during periods when long-distance travel is prevalent, like the holidays.
Musk’s compensation plan and FSD subscription targets
Tesla’s shift to a subscription-only FSD model comes amidst Musk’s 2025 CEO Performance Award, which was approved by Tesla shareholders at the 2025 Annual Shareholders Meeting with roughly 75% support. Under the long-term compensation plan, Musk must achieve a series of ambitious operational milestones, including 10 million active FSD subscriptions, over the next decade for his stock awards to vest.
The 2025 CEO Performance Award’s structure ties Musk’s potential compensation to Tesla’s aggressive targets that span market capitalization, vehicle deliveries, robotics, and software adoption. Apart from his 10-million active FSD subscription target, Musk’s compensation is also tied to Tesla producing 20 million vehicles cumulatively, delivering 1 million Tesla bots, and having 1 million Robotaxis in operation. He must also lead Tesla to a market cap of $8.5 trillion.
If successful, Elon Musk’s 2025 CEO Performance Award could make him the world’s first trillionaire. It could also help Tesla become the world’s most valuable company by market cap by a notable margin.
Tesla Model 3 and Model Y dominates U.S. EV market in 2025
Tesla Model 3 and Model Y earn Euro NCAP Best in Class safety awards
