Currently reading: Volkswagen confirms €20,000 price for affordable EV due 2027
Inbound tech developments will allow new entry-level Volkswagen to enter low-cost EV segment

Volkswagen has officially confirmed plans to launch an entry-level electric city car with a price of €20,000 (around £17,000) and a launch date target of 2027. 

As reported previously by Autocar, the model – known as the ID 1 – will channel the spirit of the now-axed Volkswagen Up and could even take its name when it arrives, rivalling the new Citroën e-C3

The EV will be one of four affordable electric cars built in Spain by the Volkswagen Group, alongside the Skoda Epiq compact SUV and two additional, €25,000 small electric cars – one from the Volkswagen brand and the other from Cupra

Any affordable VW EV would likely spawn a Seat sibling. This follows confirmation by brand boss Wayne Griffiths to Autocar last month that Seat will launch a €20,000 electric car, but he said such a car is not an immediate priority as it would not be profitable today. 

With the entry-level VW EV targeting a launch date of 2027, it can be expected that Seat's equivalent model will follow in quick succession; likely by 2028.

Thomas Schäfer, Volkswagen brand CEO, said: “The future is electric. In order for electromobility to become widespread, attractive vehicles are needed, especially in the entry-level segment. 

“Our brand promise is electromobility for all. Despite the attractive price, our vehicles will set standards in the entry-level segment in terms of technology, design, quality and customer experience.”

Volkswagen ID 2all concept

Schäfer added that the move to build smaller electric cars is increasingly difficult, due to rising costs and a lack of physical resources. This echoes comments made earlier this year by Toyota, which said the chances of an electric Aygo supermini were slim due to the cost of batteries. 

The VW brand boss also called for more support from governments. “This task has become more demanding due to rising energy, material and raw material costs,” Schäfer said. “One thing is clear: electromobility from Europe for Europe can only succeed with political support and competitive framework conditions.”

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Volkswagen confirmed plans for a new entry-level EV last year when it revealed the slightly larger ID 2all concept and it is now working to bring the ID 1 to production within the next three years as a replacement for the Up, which recently went out of production after 12 years.

Revealing that the first design sketches are complete and that development is under way, technical development boss Kai Grünitz suggested it will be an obvious successor to the successful city car in its conception and will share some design elements and attributes. 

“The ‘ID 1’ will be close to the Up regarding the usage of that car," he said. "There aren't so many possibilities to design a small vehicle for cities in terms of what it looks like. It will be a car that fits into the Volkswagen brand design DNA and functionality DNA but at a lower price.”

He stopped short of categorically confirming the return of the Up badge, but Volkswagen places great value on its longest-running and most successful names. GolfPassat and Tiguan are all due to be retained in the EV era, with the suggestion that the brand’s numerical naming strategy for its ID EVs could be retired. 

Grünitz outlined the importance of bringing such a car to market: “You need a smaller car that’s affordable for the broader customer base. That’s why we’re going for €25,000 for the ID 2all and we're invested in the development phase for a vehicle below €20,000 - that’s Volkswagen. 

“We have to go in that direction to convince our customers that EV is the right way.”

Taking into account Volkswagen’s new 36-month vehicle development timeframe, the ID 1 could break cover before 2027. Indeed, Grünitz said the wraps will come off “several years before the end of this decade”.

Set to be based on a bespoke platform, distinct from the ID 2’s MEB Entry architecture, it will be developed with a rigid focus on keeping costs down, which means it won't play host to the same levels of advanced autonomy and connectivity functions shared by other, more expensive Volkswagen models. 

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“You need a car that really fits the customer demands in that price class. You don’t need high-end technology within these cars," said Grünitz.

“Maybe you could bring your own device into this car instead of having a huge infotainment system, or something like that,” he added, hinting at the possibility for the Up replacement to feature a smartphone cradle in place of a touchscreen, like the previous car. 

“It has to be tailored to the customer group,” he said, adding that the focus will instead be on making it “bigger inside than outside”, with effective use of space and a range of innovative storage solutions.

Neither will the final car be equipped with 200kW fast-charging capacity or a battery that allows it to travel long distances because it's envisioned as a pure city car, “not a car for driving thousands of kilometres on the highway”.

The Volkswagen e-Up, retired last year along with the petrol Up as production came to a close in Bratislava, Slovakia, had a claimed range of 161 miles and could charge at a maximum speed of 37kWh. 

Asked by Autocar whether the Up’s replacement can be produced profitably, Grünitz suggested that it might not need to generate huge margins in its own right but could rather serve as a ‘loss leader’ by introducing younger users to the VW EV line-up.

“Should it be a vehicle that is profitable on its own, or should we look for a vehicle that might be for first users? I started with a Polo when I was 18 years old. I got in touch with the VW family, jumped into a Golf and never left the Volkswagen family. It’s really important to have a vehicle for first-car users," Grünitz said.

“There's also the possibility to earn money with more expensive cars,” he said, suggesting margins from larger cars could be sufficient to support production of a less profitable model.

Felix Page

Felix Page
Title: News and features editor

Felix is Autocar's news editor, responsible for leading the brand's agenda-shaping coverage across all facets of the global automotive industry - both in print and online.

He has interviewed the most powerful and widely respected people in motoring, covered the reveals and launches of today's most important cars, and broken some of the biggest automotive stories of the last few years. 

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tetsuyo11 29 May 2024
Not bad and cheaper is good but herein lies the problem with EVs. Prices is proportional to storage KWH /range whereas in the the past ICE was price was proportion to engine size/power. Cheaper ICE with smaller engines had greater range. Maybe governments with their highly paid consultants didnt click. Hence EV sales for private buyers have crashed globally, only thing holding up EV sales are mass fleet purchases. Also the average UK wage is circa £36000 with that being London Centric. Now everyone go figure. Same issue with solar panels, heat pumps. When you got a family to feed and mortgages, EV is the last thing on the majority's mind!
Cckicks2 30 May 2024
When we had panic buying fuel. We had queues of cars, so you do need to store a lot of fuel for a car. An EV is different. Most people have their own personal EV filling station.

You just think about things differently with an EV.

catnip 29 May 2024

Isnt it interesting how some manufacturers are now becoming interested in this "afffordable" end of the market now, it is perhaps because they're struggling to sell all their premium, expensive electric models?

Mr Grunitz talks about loss leaders, and small profits for entry models subsidised by the higher margins on models further up the range as if its some new idea. Its what manufacturers used to do years ago, to attract new and younger drivers to the brand. Its called long term thinking, something that went out of the window when they started getting greedy.

catnip 10 January 2024

I'm really not interested in when "the wraps will come off", its when people can actually buy the thing and at what price that is important. The VW group seem to be particularly bad at this, we had that article yesterday where someone had said they were delaying the ID2all til 2026 rather than 2025, but VW strongly deny this. When you read it though, its only being "unveiled" in 2025, so it is 2026 after all. Talk about smoke and mirrors.