VW will start making electric vehicles in China in 2014

Volkswagen will start making electric vehicles in China in 2014 and will reach full EV-production capacity four years later, Reuters is reporting, citing VW China operations chief Karl-Thomas Neumann, who was speaking at a Beijing convention.

The German automaker, which has partnerships with China's FAW Group and SAIC Motor Corp., will also debut its first plug-in hybrid-electric vehicle in China in 2015. Neumann said EVs are "desperately needed" in China, the wire service said.

VW is banking on EV demand from a country expected to eventually overtake both the U.S. and Europe when it comes to electric-vehicle demand. Green research firm Pike Research said last year that Asia-Pacific will account for about 617,000 annual sales within five years, almost the number annually sold in North America by that time.

China is VW's largest market, accounting for more than a quarter of the automaker's vehicle sales in 2011. Last year, VW sold 2.26 million vehicles in China, up 18 percent from a year earlier.

In September, China Car Times reported that Volkswagen's Shanghai unit will launch an electric vehicle-only sub-brand with called Tantos, whose first EV model will be the E-Lavida. VW reportedly will likely have another EV-only badge called Kai-Li.