The German automaker may build two electric models with venture partners in China as early as late 2013, said VW China CEO Karl-Thomas Neumann. The models may have a range of 100 to 200 kilometers, he said.

Governments in China and Europe are getting "more realistic that electric cars could quickly replace internal combustion engines," he said. Electric cars need "some time" to develop, Neumann said at the Guangzhou auto show.

Volkswagen is counting on China to help it surpass General Motors and Toyota Motor Corp. as the world's biggest automaker by 2018. VW will spend 14 billion euros (120 billion yuan) from 2012 through 2016 to expand in China.

Production capacity

Neumann reiterated VW's plans to double production capacity by 2015 and said it will exceed 2 million deliveries in China this year. VW sold 1.9 million vehicles in the first 10 months, up 15 percent from a year earlier.

China's sales of cars and commercial trucks may grow only 2 percent this year, while passenger-car deliveries may increase 9.4 percent, Neumann said. VW is "very optimistic in the medium term" on the outlook for car demand in the country given the low rate of ownership, he said.

The China Association of Automobile Manufacturers expects nationwide vehicle sales to grow less than 5 percent this year, slowing from last year's 32 percent gain, after the expiration of government purchase incentives hurt demand.

VW produces cars and sport-utilities in China through joint ventures with SAIC Motor Corp. and China FAW Group Corp. The two ventures each have created a prototype EV and will introduce test fleets next year, said Neumann. VW aims to have 10,000 EVs in the country by the end of 2018, he said.

"It's not clear what the rules will be around the electric car," he said. "That's one thing I'm asking for, that we get clear guidance from the government."

VW also markets the Audi, Skoda and Bentley brands in China, the world's largest auto market. It is introducing the Seat brand at the Guangzhou show.