When the wraps came off the roofless, doorless ID Buggy, our initial reaction was lust and then dismay as we assumed VW would never actually build it. Sure, the ID Buggy does a great job of demonstrating the flexibility of VW's electric MEB (modular electric drive) platform, but surely its outrageous impracticality; simple, old-school styling; and stark packaging would keep it from making it to market. Turns out we were wrong to judge.

VW execs love the buggy, too, and it seems poised to get the green light. We also went right to the top and asked Herbert Diess, CEO of the VW Group, about its prospects. MEB is a nice fit with the dune buggy, Diess said, and it's the kind of enthusiast-oriented vehicle VW wants to include in its portfolio of EVs, which also will include the ID Buzz, a modern and electric take on the Microbus. The objective is to make electric mobility attractive for a broader base of customers—not just for the rich.

"We decided on the Buggy because it is the most emotional and irrational vehicle we could develop," said Diess. "We could do this car if we keep one-time spending low and one-time investment low."

VW is only looking at annual volumes of 5,000 to 10,000 units for the Buggy, but it would enjoy the economies of scale generated by a platform expected to underpin 27 different VW Group models by 2022 and yield 15 million vehicles in its first seven years. VW will churn out 1 million electric cars a year by 2025, the company says, and that sort of scale can make niche projects possible.

We talked to Scott Keogh, too, the CEO of Volkswagen Group of America, and he says he'd love to see it built—and to own one. He describes it as a cool opportunity that taps into demand for retro and nostalgia but offers something modern with the electric powertrain. VW is looking at bringing the ID Buggy to Pebble Beach this year to gauge consumer reaction, although that's not exactly the mass-market audience VW hopes can afford a production version.

VW will do a financial feasibility study and a market study, but Keogh notes there was no market study forthe Beetle. "Sometimes you need to do things that break market studies."

Klaus Bischoff, the head of Volkswagen Design, told us point blank it will go into production in two years, and that assembly is being contracted out to e.Go Mobile, a German electric startup. E.Go is the first outside partner to take VW up on its offer to share the MEB platform with other automakers, notably startups, who want to do low-volume electric vehicles but cannot afford to develop hardware of their own. No U.S. firms have entered talks with VW yet, said Keogh.

A team from e.Go was involved in conceptualizing the ID Buggy because of its interest in building it for VW, said Juergen Stackmann, member of the Board of Management for the Volkswagen brand responsible for sales, marketing, and aftermarket sales. He also said the project must go through feasibility studies "but there is strong willpower to do it."