The electric era has officially begun for Volkswagen AG (OTC:VWAGY). VW took the wraps off its first designed-from-the-ground-up mass-market battery-electric vehicle, the ID.3, at the International Motor Show in Frankfurt, Germany. 

For VW, this is a big deal, one that it hopes will be as important as its first two iconic small cars, the Beetle and the Golf. The ID.3 is the first in a series of new electric vehicles that VW is expected to launch over the next few years. And while this one won't be sold in the U.S. (at least at first), a closely related SUV is expected to arrive in the U.S. next year. 

Here's what we know.

A white VW ID.3, a battery-electric hatchback, on VW's show stand in Frankfurt, Germany.

VW hopes that its new electric ID.3 will spark a mass-market shift toward electric vehicles. Image source: Volkswagen AG.

The ID3: First of a series of electric VWs

The VW ID.3 is the first of a new line of VW Group vehicles to be built on what the company calls its Modular Electric Drive Matrix (or "MEB," its German abbreviation). Think of MEB as something like a Lego set: It's a series of pre-engineered modules that can be used to underpin battery-electric vehicles of various types and sizes.

Here, it's underpinning a roomy compact hatchback intended as a European-style daily driver. While the car itself is compact, for easy parking and maneuverability in urban areas, the electric architecture has allowed for a relatively roomy interior with seating for five.

A view of the front seats and dashboard of an ID.3, showing minimalist design and a large touchscreen centered on the dash.

The ID.3's interior combines the brand's usual simple-but-high-quality elements with a big Tesla-inspired touchscreen. Image source: Volkswagen AG.

VW said that the ID.3 will be available with 3 battery size options once production is up to full speed:

  • A basic version with a 45 kilowatt-hour (kWh) battery, claimed range of up to 330 kilometers (about 205 miles) on the WLTP test standard, and a starting price under 30,000 euros.
  • A mid-level version with a 58 kWh battery and WLTP range of up to 420 km (260 miles).
  • A top version with a 77 kWh battery and WLTP range of 550 km (341 miles)

Fast-charging capability is standard on all versions of the ID.3. VW said that with a 100-kilowatt DC fast charger, the ID.3 can recharge for a range of about 290 km (180 miles) within 30 minutes. 

VW began taking reservations (in Europe) for an early launch edition of the ID.3 in May. Those first 30,000 ID3s will have the 58 kWh battery, a single electric motor driving the rear wheels, and a starting price under 40,000 euros. That's not far from the starting price of Tesla's Model 3 (43,390 euros in Germany), but -- at least on paper -- the 58 kWh VW's 420-kilometer range slightly beats the base-trim Tesla's WLTP-rated range of 409 km. 

For now, VW has no plans to sell the ID.3 in the United States -- but there are other electric VWs on the way. 

This is a big deal for Volkswagen -- and the industry

For Volkswagen -- and probably for the auto industry as a whole -- this is a big deal. VW thinks of the ID.3 as the beginning of the third phase of its corporate history, after the Beetle (the original VW) and the Golf, the car that brought VW into the modern era in the 1970s. 

The ID.3 is the first of a series of MEB-based Volkswagens that the company hopes will add up to about 3 million sales a year by 2025. It'll be followed next year by an electric crossover SUV based on the I.D. CROZZ show vehicle, and then by a few other models including the production version of the I.D. BUZZ, a minivan with styling that riffs on the iconic VW Microbus. 

The VW I.D. BUZZ show vehicle, an electric minivan with styling inspired by the VW Microbus of the 1960s, shown driving on a beach road with surfboards on its roof rack.

A production version of the electric I.D. BUZZ show vehicle will arrive at U.S. dealers in 2023, VW said. Image source: Volkswagen AG.

For investors in auto stocks (any auto stocks), this is an important moment. VW has committed billions to its electric-vehicle effort. Now, the first one is hitting the market, and the whole automotive world is watching: Will enough buyers show up to make it profitable for VW?

The answer to that question will have big implications for nearly all automakers. Stay tuned.