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German car giant Volkswagen wants to give electric cars to the masses at prices not much more than its combustion engine models, with China to spearhead the push.

Christian Senger, head of Volkswagen’s electric car project, and a former key player in BMW’s development of the battery-powered i3, told reporters in Shanghai this week that the company had made “huge progress” in the electrification of its cars by reducing production costs of its all-electric vehicles.

“Offering our electric cars for prices similar to combustion engine vehicles is a game changer”, according to Senger. “We’re using the need to step from traditional combustion engine cars to reinvent the Volkswagen brand”, he added.

China is Volkswagen’s largest market, and is poised to become a major consumer of EVs, as the country looks for ways to combat ever increasing smog in its manufacture-laden cities. The Chinese government has already put in place strict targets to fight smog, as well as reducing the number of electric-vehicle manufacturing permits to just 10 (down from 200 currently).

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While Tesla is relying on its upcoming Model 3 to become a best seller, the company is yet to make an annual profit from its electric car business, though its market capitalisation is larger than both the Ford Motor Co, who has the Focus Electric and General Motors, who has the Chevrolet Bolt.

The worldwide demand for electric vehicles, though, is still incredibly small. This year’s production forecast is said to hit 950,000 vehicles – up 26 per cent – or just less than the total number of new cars sold in Australia each year.

Even Volkswagen, with all its plans in place, is modest about its own EV forecast over the next decade. Currently, it only sells small numbers of all-electric versions of its Golf hatch and UP! city car.

But with Senger’s announcement to roll out four affordable electric vehicles under the company’s ID sub-brand in the coming years, Volkswagen has set a target to sell one million electric vehicles by 2025.

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The real acid test, though, will come when Tesla’s upcoming Model 3 goes on sale later this year.

It’s the world’s first mass-produced and affordable all-electric vehicle to enter the mainstream market, and the first year of production is already sold out. That means even those who pre-ordered, may not get their car until 2018.

Meanwhile, Volkswagen Australia PR boss Paul Pottinger told CarAdvice they are taking a good, hard look at the upcoming Golf GTE – a Plug-in Hybrid Electric Vehicle (PHEV), slated for later this year. Read our review here.

MORE: VW details Transform 2025+ plan: e-mobility onslaught
MORE: VW Australia keen on EVs and plug-ins
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