The Financial Times Deutschland reported on Friday that VW will present an electric version of its Golf-based Lavida model by the end of April at the Beijing motor show.
Citing sources within upper echelons of VW's management, the paper said the company hoped to catch up with competition with an ambitious push into electric-powered cars. Presently, Volkswagen lags behind rivals such as Toyota in developing hybrid vehicles combining electric drive and combustion engines.
But VW hopes the e-Lavida will help it close the technology gap since China subsidises each electric car by roughly €6,000 – approximately the extra cost incurred over a traditional vehicle.
Volkswagen is also hoping to profit from its strong market position in China, where it accounted for 1.4 million out of 6.3 million total vehicles sold in 2009.
The Lavida electric model is likely to have most of its parts sourced from Chinese producers, including the battery expert Build Your Dreams (BYD). VW's German rival Daimler announced two weeks ago it was also partnering with BYD to build electric cars in China.