Volkswagen close to final design of £17k ID 1 electric car

Volkswagen is set to sign off the final design of the Volkswagen ID 1 imminently, brand chairman Thomas Schäfer has said, with four proposals being debated for the £17,000 entry-level electric car.

Conceived as a replacement for the 11-year-old e-Up, the new model is planned to go on sale across Europe by the end of 2027 at a price equivalent to around £17,000.

Speaking at the company’s annual accounts press conference, Schäfer confirmed Volkswagen will decide within the next few weeks what direction the ID 1 will ultimately take.

“The working title is ID 1 and the vehicle is planned for 2027. We’re in the middle of it all. We know what the car should look like,” he said.

The ID 1 will directly rival the fourth-generation Renault Twingo, which is planned to be launched in 2026 as an electric hatchback with styling highly reminiscent of the original and with a projected price similar to the upcoming Volkswagen's.

As well as deciding what form the car will take, Volkswagen has yet to lock in the industrial plan for its new entry-level electric model. “This is extremely challenging,” said Schäfer.

Given high battery and production costs in Europe, a price of £17,000 is likely to be achieved only with large volumes and high economies of scale.

Development and production costs can be amortised across other Volkswagen Group brands, including Skoda and Seat/Cupra, Schäfer said, adding: “We will make the decision in the short term.”

Recent reports have suggested that Volkswagen could join forces with Renault and possibly develop and produce the ID 1 in partnership with the Twingo.

At an earlier press conference this week, Volkswagen Group CEO Oliver Blume said a decision on an entry-level model would be made in 2024, referencing the possibility of a tie-up with Renault.

“We are working conceptionally on a solution and are not ruling out partnerships in this area,” he said.

The Volkswagen brand, which has initiated an £8.5 billion cost-cutting drive in a bid to improve profitability during the transformation to an all-electric line-up, says it will streamline development processes in a move intended to reduce the crucial "time to market" for future models from a previous 54 months to 36 months.

On this timeframe, the ID 1 could begin sales in 2027, provided a production go-ahead is given by Schäfer this year.

The upcoming Volkswagen is among 11 new electric-powered ID models currently planned for launch by the end of 2027. Described on a Powerpoint slide revealed by Schäfer as the 'Entry-Level E-Volkswagen', it is positioned below the ID 2, which is set to be launched in the UK in 2026.