Initial EV output at Shanghai Volkswagen and FAW Volkswagen was estimated at a few thousand vehicles, rising to 100,000 by 2018, Neumann told an EU-China business convention in Beijing.

Sales of EVs have been limited by high battery costs, a lack of economies of scale and the dull look of the models already available. Neumann expects those challenges will be overcome. "I am convinced e-vehicles will be a success in China because I think it is desperately needed," he told the convention.

He added that Volkswagen, which has partnerships with SAIC Motor Corp and FAW Group in China, would launch its first plug-in hybrid in the country in 2015. Each of Volkswagen's joint ventures would develop its own EV, Neumann said. He did not specify whether the 100,000 EV output planned for 2018 was for each JV or a combined target.

The central government has named the EV industry a top priority, earmarking $1.5 billion (9.4 billion yuan) annually for the next 10 years to become one of the leading producers of clean vehicles. The government has named 25 cities, including Beijing, Hangzhou, Shanghai and Shenzhen, to lead the move to green vehicles.

However, demand for EVs has been held back by a lack of models, limited charging facilities, high sticker prices and safety concerns.