Volkswagen secures $35 million to build its most affordable EV yet, the ID.1

Volkswagen was awarded 30 million euros ($35 million) to build the ID.1 in Portugal on Tuesday. The ID.1 will start at about 20,000 euros ($22,000) as the smallest, most affordable EV in the Volkswagen lineup.

Volkswagen moves closer toward affordable EVs

The ID.1 is “the last piece of the puzzle,” according to Volkswagen brand CEO Thomas Schäfer. We got a sneak peek of the new entry-level EV in September after VW unveiled the ID.EVERY1 concept.

Although it was just a concept, unlike many, Volkswagen is bringing this one to life. The ID.EVERY1 concept previews “an electric 20,000 euro Volkswagen,” the company said earlier this year.

After signing a deal with the Portuguese government on Tuesday to produce the new entry-level EV, Volkswagen is one step closer to bringing it to market. Thomas Hegel Gunther, president of Volkswagen’s Autoeuropa plant in Portugal, confirmed the ID.1 is scheduled for production in mid-2027.

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Gunther also confirmed it will be the new VW entry-level EV with starting prices at 20,000 euros ($22,000). “The coming years will be marked by making the future a reality, Gunther said at the event.

The government will contribute up to 30 million euros ($35 million) in state aid to help get it started. “For more than three decades, Autoeuropa has been more than a pillar of the national economy,” Manuel Castro Almeida, Portugal’s Minister of Economy, said, adding, “Today, it reinforces that legacy.”

Measuring just 3,880 mm long, the ID.1 will sit between the former Up! (3,600 mm) and ID.2 (4,050 mm). It’s slightly smaller than the Polo (4,074 mm).

Following the ID.2 and an SUV version, due out next year, Volkswagen will launch the ID.1 in 2027. Thanks to its partnership with Rivian, it will not only be the most affordable Volkswagen EV but also the first software-defined vehicle (SDV) model. All three vehicles are part of VW’s Electric Urban Car Family, its new entry-level series.