Volkswagen is preparing to launch its first all-electric I.D. car in 2020 to meet increasingly strict emissions rules in Europe and China.

VW brand CEO Herbert Diess told analysts last week that the I.D. concept hatchback shown at the Paris auto show last year is expected to have its design approved in August for the 2020 launch.

The second electric vehicle will be an SUV coming out after 2020, with a concept shown next month in Shanghai. The I.D. Buzz minibus concept previewed at the Detroit auto show in January will be the third and should come out in 2022.

All of the I.D. series will be built on the new MEB modular electric platform.

The European Union expects new vehicles sold fleetwide by automakers to reduce CO2 emissions down to 95 grams per kilometer by 2021. China should require about 117 grams per kilometer in the foreseeable future.

Diess said contracts to source the batteries have already been signed. Components used in a new electric/electronics architecture is being researched by his team.

“It’s a very tight time plan for 2020, but we need the cars then to comply with our fleet targets. So, it’s a necessity to achieve the launch dates, but it’s well on the way,” Diess said.

Revealing the new electric SUV concept built on the MEB platform makes sense for the automaker to reveal at the Shanghai auto show. China could be the top selling EV market for VW, and an electric SUV could have its appeal.

The German automaker has pledged to sell at least 400,00 “new energy vehicles” in China in 2020, which fall under the Chinese government’s requirements for all-electric and plug-in hybrid vehicles sold in the country. The company thinks the NEV sales volumes will grow in the years after 2020.

China presents challenges for VW to overcome since there’s no market for diesel vehicles there, and sales are leaning toward larger vehicles like SUVs that are heavier and less aerodynamic than cars. That will have its effect on the reducing carbon emissions fleetwide and selling EVs with enough range to be viable in the market.

China’s regulations use the model of just five liters per 100 km, which is roughly equivalent to 117 grams.

“This five-liter target is as challenging as the 95 gram CO2 target in Europe for 2020. In addition, China is on the way to implementing really the most challenging emission regulations worldwide,” Volkswagen Group China chief Jochem Heizmann told analysts.

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China will be vital for VW to hit its one million EVs sold by the year 2025, Diess said.

It will be “our volume base and scale base for all the electric vehicles we are doing,” he said.

MEB architecture will be carried over to VW’s Audi, Seat, and Skoda brands, and the variations are being worked on now. The company is confident that the new platform will create a profitable baseline for the automaker to work from.

“I am confident that already the first cars will be profitable, not hugely profitable but profitable, and the later-coming, more SUV-based, bigger cars should achieve good returns on investment and also good margins,” Diess said.

If the U.S. decides to back off fuel efficiency and greenhouse gas emissions targets, China and Europe could still drive automakers such as VW over to more electrification.

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