Rupert Stadler, chairman of Audi, told Bloomberg that the German luxury brand is working on a zero emissions vehicle that satisfies US regulations.
"It's probably going to be a crossover, but development work is still ongoing," Stadler said.
According to the business website, if all goes according to plan Audi's first practical all-electric vehicle will go on sale in 2017 and will tackle the Tesla Model X (below) head-on.
The Model X has been delayed several times since it made its debut back in 2012. Originally slated for sale in 2013, the Model X is now scheduled to start moving down the production line in the third-quarter of 2015.
When the Model X hits the showrooms it will feature a version of the prototype's "falcon wing" doors.
The company will also add plug-in hybrid variants to its existing model range. The Audi A3 Sportback e-tron, which we drove earlier this year, is the first cab off the rank and will hit the Australian market from March 2015.
Equipped with a 1.4-litre turbocharged four-cylinder engine, electric motor and six-speed dual-clutch transmission, the 150kW/350Nm A3 e-tron will have a fuel consumption rating of around 1.6L/100km. It should be able to muster around 50km of emissions-free driving with a fully charged battery.