Execs hope the electric Volkswagen ID. Buzz can revitalize interest in the ailing German brand. The spiritual successor to the T2, reborn as an electric minivan decades later, edged out the Hyundai Santa Fe SUV and Chevrolet Equinox EV crossover to be named North America’s best new utility vehicle.

As of the New Year, Volkswagen can finally chalk up a win following a disastrous 2024 when the German brand made headlines for all the wrong reasons.

On Friday, a jury responsible for awarding North America’s Car of the Year bestowed top honors to its electric minivan, the retro-styled ID. Buzz, in a segment traditionally dominated by SUVs and crossovers.

“No vehicle in the last 10 years has captured the imagination—while also bringing the past into the future—better than the Volkswagen ID. Buzz,” said John Davis, host of MotorWeek and one of the 50 independent motoring journalists on the jury panel.

The ID. Buzz edged out the Hyundai Santa Fe, the other main finalist, for the prestigious title of 2025 North American Utility Vehicle of the Year, as well as the Chevrolet Equinox EV, a distant third. SUVs and crossovers are among the most lucrative and competitive models in the U.S. market, and are much more important financial contributors than passenger cars.

“In what was my toughest category to decide, the all-new Volkswagen ID. Buzz comes out on top. It’s the segment busting vehicle that might make minivans cool again,” said John Vincent, senior editor for vehicle testing at U.S. News & World Report.

Separately, the jury also awarded the Honda Civic Hybrid and the Ford Ranger in the other two categories of car and truck of the year, respectively.

High hopes following years stuck in development

Patterned on the iconic Volkswagen T2 bus synonymous with 1960s counterculture, the ID. Buzz first debuted as a concept car at the Detroit motor show all the way back in January 2017.

Its enormously positive critical and commercial reception ensured the vehicle would be built, evading the fate of the previous gas-powered 2001 concept. This was in part because VW engineers found a way to save development and manufacturing costs by stretching the same architecture underpinning its ID.3 compact hatchback to fit an EV the size of a large van.

But it still took five years before the ID. Buzz could finally launch in Europe, and another two after that before the extended version with a longer wheelbase was ready for U.S. shores. The first thousand vehicles have only been shipped to American customers from Germany, where the model is exclusively built, over the past three months.

Although it is a niche model, execs have high hopes for the vehicle because VW finally has first-mover advantage in a segment where it enjoys residual goodwill through the association with the T2 bus.

“The ID. Buzz is a unique vehicle on the North American market, since it is the only electric people hauler on the market right now,” said Kjell Gruner, CEO of the group’s operations in the United States, on Friday following the award.

Steeper annual sales decline than Tesla

If successful, they hope the halo-like effect it radiates should inject fresh interest into the brand as a whole. Nevertheless, there has been skepticism whether the initial excitement could translate to years of recurring sales after such a long and grueling developmental stage.

News of the prestigious honor comes shortly after the brand acknowledged the sales volume of its vaunted range of purpose-built electric vehicles continues to disappoint. Last year deliveries of VW’s dedicated ID. range of EVs sank nearly 3% to 383,100 vehicles. At this point, even the premium BMW brand, which has not yet reported 2024 sales, may end up with higher volumes for the year.

Not only could Tesla limit its annual decline to just a little over 1%, it sold 1.79 million EVs during the same period. To put that in perspective that’s far more than the 1.35 million ID.s that Volkswagen has sold cumulatively since the family was launched late in 2019.

Volkswagen ought not to be struggling—it was arguably the earliest follower of Tesla and was often cited in the past by Elon Musk as a legacy carmaker he respected. The chief problem for VW when it came to product wasn’t in the drivetrain then so much as in the software and electronics—that’s why they’re now partnering with Rivian.

Another key factor has been the bursting of China’s real estate bubble, which has turned the country from a marketplace to a competitor.

“Around the globe, 2024 was a difficult year with sluggish economic activity, political challenges and intense competition—particularly in China,” said Volkswagen brand sales and marketing chief Martin Sander in a statement.

Threats of plant closures, job cuts and management sackings

As a result, Volkswagen for the first time has acknowledged it had three manufacturing plants too many in Germany, and thousands of employees, whose wages it could no longer afford. Weeks of recrimination ensued between the company and its powerful German labor unions.

Management has not been spared either. The group’s head of North America got the sack in part because he failed to juice sales of its ID.4 electric crossover. U.S. sales of its locally-built model crashed by 55% to just 17,000 units last year.

Sander said his brand had the right products to finally manage a turnaround. “We are beginning the new year with optimism,” he said.

That’s good news. because VW certainly cannot afford another 2024. Friday’s award ought to give him at least some hope the worst may indeed be behind it.

Volkswagen’s successor to its iconic 1960s bus scoops up prestigious award in rare win for struggling carmaker