Volkswagen AG has secured €30 million ($35 million) in state aid from the Portuguese government to produce its new ID.1 electric vehicle at the Autoeuropa plant, the company said on Tuesday. The ID.1 is expected to start at approximately €20,000 ($22,000), making it the smallest and most affordable EV in Volkswagen’s lineup.
Volkswagen brand CEO Thomas Schäfer described the ID.1 as “the last piece of the puzzle” in the company’s expansion into entry-level electric vehicles. The model follows the unveiling of the ID.EVERY1 concept in September, which previewed a €20,000 electric Volkswagen.
Thomas Hegel Gunther, president of Autoeuropa, confirmed that production is scheduled to begin in mid-2027. “The coming years will be marked by making the future a reality,” he said at the announcement. Manuel Castro Almeida, Portugal’s Minister of Economy, emphasized the significance of the investment, stating, “For more than three decades, Autoeuropa has been more than a pillar of the national economy. Today, it reinforces that legacy.”
The ID.1 measures 3,880 mm in length, positioning it between the former Volkswagen Up! (3,600 mm) and the ID.2 (4,050 mm), and slightly smaller than the Polo (4,074 mm). The model will be part of Volkswagen’s Electric Urban Car Family, an entry-level series that also includes the ID.2 and a forthcoming SUV version scheduled for release next year.
Volkswagen plans for the ID.1 to be not only its most affordable EV but also its first software-defined vehicle (SDV), developed in partnership with Rivian. The move reflects Volkswagen’s broader strategy to expand access to electric vehicles while advancing digital capabilities across its vehicle lineup.