- Volkswagen announced a new plan on Wednesday that signals a broader shift towards building affordable EVs.
- A new entry-level model positioned under the ID.2 is coming to Europe by 2027, the automaker said.
- The plant in Wolfsburg is on track to become Volkswagen’s “capital of our new all-electric compact class.”
Beyond the first and second waves of early adopters, electric cars have been somewhat elusive to the masses due to their high costs. Volkswagen, the world’s second-largest automaker by sales volume, announced plans today to change that. The brand will launch a new entry-level EV that will be part of a wave of new affordable model launches over the next few years.
At its works meeting in Wolfsburg, Germany on Wednesday, Volkswagen said it has a new three-stage plan to remain competitive in the EV race, an area where it has struggled so far. Stage one is “catch up,” followed by “attack” and “lead.” The new affordable EV, presumably called the ID.1 (that name is unconfirmed) would be central to that plan.
It would start at €20,000 ($20,800) and be produced in Wolfsburg, which the brand said would now become the “capital of our new all-electric compact class.” It will be revealed in March and go on sale in Europe in 2027. It would be a model “from Europe, for Europe,” so it’s unclear if Volkswagen has any plans for a release in North America.
The teaser shows a conventionally shaped compact hatchback with a clean front end. The headlamps are united by a thick black horizontal surround with an illuminated VW logo at the center, and vertical fog lamps housed in the bumper. VW didn’t share any technical details, but logic suggests it will ride on the modular electric drive (MEB) platform that underpins its current slate of ID series of EVs.
“We set the largest future plan in Volkswagen’s history in motion,” VW CEO Thomas Schäfer said. “We are pursuing an ambitious path to ensure we achieve our shared goals with full commitment. A key step in this is making e-mobility attractive for everyone—that is our brand promise.”
Before the new affordable EV goes on sale, Volkswagen will first launch the production version of the €25,000 ID.2all hatchback in Europe in 2026. It also plans to launch the next-generation electric Golf based on the scalable systems platform (SSP) by the end of the decade.
The Volkswagen ID.2all would be launched in Europe next year at about €25,000.
The list of Volkswagen’s problems is lengthy and complicated. The German automaker has been facing severe headwinds amidst the broader electrification of the car market. Its sales have been falling, and it has struggled to keep up with the burgeoning Chinese EV brands—both in Europe and China, which is Volkswagen’s largest market by sales volume.
The company also faces competition from Tesla, which has been largely successful in Europe so far. Although, the American automaker’s sales there have only slowed down recently due to myriad reasons.
VW also narrowly averted what could have been historic plant closures in Europe after its workers went on prolonged strikes last year. Above all, its EV sales in the U.S. have been lackluster after the ID.4’s production stopped in mid-2024 to fix a faulty door issue. It’s now back on sale and has plenty of catching up to do.
The brand has no new EV launches planned for the U.S. this year. Even the ID.7 has been canceled for our market. But it has inked several strategic deals that could help revive its EV business. It revived the iconic Scout brand in the U.S. and the fruits of that are expected to arrive by 2027. VW also has a $5 billion partnership with Rivian to build electric architectures and software suites for its next-generation EVs.
If the automaker brings this new affordable EV to the U.S., it could have a genuine shot at turning things around.
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