Earlier this month, BMW debuted its first mass-produced pure electric i3 simultaneously in Beijing, New York and London.

Set to go on sale in Europe later this year, i3 will be available in China in the first half of next year.

Toyota's joint venture in China also plans to launch a mass-produced pure electric model in 2015.

Yet analysts question whether Chinese customers are willing to pay the high price of a pure electric car, in addition to the inconvenience of charging.

Amid such concerns, Hackenberg said he believed hybrid vehicle is a smarter way to green transportation.

"The e-drive can support a vehicle to run at least 50 km with one charge, which is reasonable in daily city travel, and the full range of our hybrid will be around 600 km with combined e-drive and fuel power," said Hackenberg.

Brustenga said that Volkswagen's key models will also be available with plug-in hybrid technology starting in 2014.

He said that Volkswagen will continue to drive forward technological innovations for vehicles with traditional combustion such as energy-efficient TSI and TDI engines, and low-emission BlueMotion technology.

Volkswagen also plans to make each new vehicle generation 10 to 15 percent more efficient.

In addition, its efforts in "green" vehicle production include reductions in energy and water consumption as well as waste and a 25 percent decrease in carbon dioxide emissions by 2018.