WOLFSBURG, Germany—Volkswagen AG lifted the curtain on the first of a new generation of vehicles it is betting will take the electric car out of its tiny market niche and make it the new car for the masses.

At a presentation at the company’s design center on Thursday, VW executives took the wraps off the ID.3 hatchback, the first vehicle to be built on its new standardized electric car technology. The car goes into production in Germany in the coming weeks and will be officially launched in Europe at the Frankfurt Motor Show...