In a bowl, combine flour, cocoa powder, baking powder, baking soda, and salt. Set aside.
In a stand-up mixer, using the paddle attachment, beat vegan butter and sugar until light and fluffy. Add applesauce ¼ cup at a time, scraping down the sides of the bowl as necessary until well combined. Beat in vanilla extract, apple cider vinegar, and red food coloring. The mixture will look curdled at this point.
With the mixer running, slowly add the dry ingredients to the bowl, scraping sides as necessary until all the dries are combined. Add the chocolate chips, if using, and beat until just combined.
Cover the dough with plastic wrap and refrigerator for at least 2 hours until dough is firm enough to form balls.
Preheat the oven to 350 degrees Fahrenheit. Place granulated sugar in a shallow dish. Place the powdered sugar in a second shallow dish. Roll cookie dough into balls about 1 heaping tablespoon in size. Generously coat them in granulated sugar first, and then powdered sugar until they are completely coated. Place them on a parchment-lined baking tray and bake for 10-12 minutes.
Remove from oven when cookies are slightly underdone. This is key to keep them fudgy. Let cookies cool for 10 minutes before transferring them to a wire cooling rack to cool completely.
Serve or store in an airtight container at room temperature for up to 5 days.