Not long ago, subcompact SUVs were barely worth the attention of the average car shopper. They were tiny, underpowered, awkward-looking, and existed mainly to compete with used cars. Their best attribute was a warranty, which didn’t make them all worth buying.
However, a longstanding trend in car design benefits shoppers over time. Automakers continually introduce inexpensive new cars and then improve them to gain a competitive position. Tiny cars get bigger. Bare-bones models gain features. Prices go up until—eventually—carmakers trim their lineup and introduce a new low-end, affordable option.
Right now, the subcompact SUV class is in the sweet spot in that cycle. The subcompact SUV is the least expensive model on many sales lots. But, in 2025, they’re impressive cars with plenty of features for the price.
A case in point is the 2025 Volkswagen Taos. Technically, this is Volkswagen’s entry-level SUV. In a week of driving it, though, it never once felt like it. It’s a little too small to meet every driver’s needs, but for many, this could be a satisfying everyday driver with a hint of style and a few high-tech tricks.
My tester was the midlevel SE Black trim with front-wheel drive (FWD). Shoppers in snowbelt states might consider spending $1,700 more for VW’s 4Motion all-wheel drive (AWD) system. Though my tester lacked any optional features (except for $455 for a Monument Gray paint job with a Deep Black roof), I didn’t find it lacking. The sticker price read $32,025 after a $1,425 destination fee.
Composed Ride With Competent Power
The Taos is not all-new for 2025 but has seen an upgrade for the new model year. The headline is more power. The 2025 model uses a 1.5-liter turbocharged 4-cylinder engine like the 2024 model, but it now makes 177 horsepower, up from 158 last year.
That puts it ahead of the base 2025 Kia Seltos (146 hp) or the 2025 Honda HR-V (158 hp). None of the three is a performance car, but none has the wheezy, straining character you might associate with the term “subcompact.”
The Taos also has another advantage—actual gears. Most manufacturers now use a gearless continuously variable automatic transmission (CVT) at this price point, but Volkswagen gives the Taos an 8-speed automatic transmission. CVTs have become smoother and offer better power delivery in the newest generation of cars, but it’s still a pleasant surprise to find real gear changes in the Taos.
Handling is pleasant and low-effort. The overall impression you get from driving the car is subtle competence. That wouldn’t be news in a more expensive model, but in an entry-level vehicle, it’s reassuring.
Handsome Inside and Out
Strangely, I think the Taos might be Volkswagen’s best-looking SUV.
Most automakers adopt a single design scheme for their SUVs and simply inflate or deflate them to make subcompact, compact, midsize, and full-size models.
It doesn’t always work out well. Many attractive shapes on a midsize SUV look awkward at this size—the way a bulldog seems drawn like a reasonable animal, while a pug looks like a printer-jammed version. But VW’s design language shrinks well. Character lines in the hood give it a pinstripe-suit look, and a contrast-color roof adds a stylish backbeat.
Inside, comfortable seats have a wide quilting pattern in VW’s “CloudTex” faux suede. It’s a small luxury, but it comes at a small price.
The cabin feels upscale in other ways, too. It’s an affordable subcompact SUV, but it has heated seats, a heated steering wheel, and a panoramic sunroof—refreshing finds on an inexpensive car. The suedelike material on the dash feels upscale, but it means you’ll have to invest in special cleaning products to keep this material nice over the years.
KBB editors have complained about two aspects of VW’s interior design in recent years. Volkswagen has fixed one of the two. The Taos has a small shelf under its touchscreen. A place for your fingers to rest as you tap through menus is a tiny improvement that makes a noticeable difference in usability.
Unfortunately, this car remains plagued by the touch-capacitive sliders VW has promised to ditch in favor of physical buttons. They make adjusting the temperature imprecise, but you’ll get used to them, and I wouldn’t cite them as a reason not to buy the car.
The Taos has one fun high-tech trick. The “Ida” virtual assistant is powered by ChatGPT. Unfortunately, it wasn’t active on the test model, so I can’t tell you how well it works. VW says it will require a fee after a free trial period.
Curious? Watch for Discounts
The 2025 Taos is a pleasant, likeable car and a surprisingly good value. In past years, Volkswagen tended to overprice low-end models, but it has kept the Taos’ pricing mainly in line with the rest of the subcompact SUV class.
That makes the Taos a reasonably priced, reasonably powered alternative to the HR-V, Corolla Cross, and others with handsome looks and a slightly upscale cabin.
It’s worth a look under any circumstances. However, early in 2025, buyers might get one for a bargain. VW increasingly faces headwinds in the automotive industry and has run into financial problems in its home market.
As the world’s second-largest automaker, the company isn’t going anywhere. But it’s reasonable to think that it might offer discounts as the year goes on and it tries to stay competitive in an evolving market. Currently, shoppers can lease a Taos for just $289 for 36 months in some parts of the country. I wouldn’t be surprised to see more aggressive purchase offers later in the year.