(Bloomberg) -- Having just unveiled the ID. 2all, an affordable electric vehicle that’s still a couple years away from production, Volkswagen AG is making plans for an even cheaper EV.

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An electric model to sell for less than €20,000 ($21,340), which could be called the ID.1, “should come as early as 2026, 2027,” Volkswagen brand chief Thomas Schaefer told Automobilwoche. Such an entry-level electric model is urgently needed, the magazine cited Schaefer as saying.

Volkswagen needs a mass-market car for the electric age. It’s struggled to keep pace with Tesla Inc.’s EVs, and needs to halt sales declines in China, where domestic manufacturers led by BYD Co. have stepped up their game. The brand last week previewed the ID. 2all, a car that will cost less than €25,000 and arrive in European showrooms starting in 2025. The model will be as spacious as a Golf and as inexpensive as a Polo, VW said.

The company is working hard to achieve the even lower price target despite high battery costs, including the option of using a shared platform with another manufacturer, Schaefer told Automobilwoche. “But I think we can do it alone,“ he added.

It’s undecided whether the vehicle can be built in Europe for the targeted price, or if it will have to be built in a cheaper location, he said.

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