The speculative CarScoops rendering featured in this story is not endorsed or affiliated with VW

Volkswagen confirmed that, in addition to the upcoming ID.2 compact EV, it will also be producing an even cheaper vehicle called the ID.1. The new model will push the limits of the automakers’ ability to produce an affordable electric vehicle.

Whereas the production vehicle based on the ID 2all concept will be priced below €25,000 ($26,376 USD at current exchange rates), the ID 1 will ring in at less than €20,000 ($21,100 USD). Although the two will share much in common, the former is expected to have larger, almost crossover-like proportions, while the latter will look more like a hatchback.

“We’re also working on a vehicle below €20,000 that will be even a bigger challenge,” said Thomas Schäfer, head of the VW brand. “It’s part of our DNA where Volkswagen has also a commitment that we all have to embrace, and we’re working on at full steam ahead. In the next couple of months we will be reporting on this.”

Read: Entry-Level VW ID.1 Due In 2025, Will Replace The e-Up!

 VW Confirms Sub-$21k Entry-Level ID.1 Small Electric Hatchback

Schäfer admitted, though, that creating this vehicle is not easy, saying that VW will have to work on creating economies of scale in order to make the ID.1 profitable. Fortunately, the automaker has sister brands, like Škoda and Cupra, through which a rebadged version of the vehicle can be sold.

That will help bring down the cost of production, but the automaker is also expected to use cheaper lithium iron phosphate battery chemistries to help with that, reports Autocar. Those cells aren’t as energy dense as lithium-ion batteries, but that matters a bit less in a smaller, lighter vehicle.

Expected to be roughly the same size as the Polo, may still be large enough to lug around 57 kWh of batteries. That could give it a range of around 250 miles (402 km), which would be a massive improvement over the likes of the VW e-Up!

Unfortunately, given its size, VW is unlikely to offer the ID.1 (or the ID.2, for that matter) in North America. The electric city car will likely be limited to Europe and other markets whose buyers appreciate little vehicles.

 VW Confirms Sub-$21k Entry-Level ID.1 Small Electric Hatchback