Tesla's Roadster and Model S have garnered much of the hybrid and electric press of late, though new entries from Ford and Honda have also gathered some attention. Now Volkswagen is looking to share in the spotlight, announcing the signing of a letter of intent with Toshiba for cooperation on the development of electric drive units for future cars.

The drive units are destined for what VW calls its New Small Family, likely based around the Volkswagen up! range of concepts. The battery and drive systems used to propel the cars are covered by the scope of the letter of intent, though at this point no formal agreement has been reached. The end goal of the partnership is to be the first manufacturer provide an emissions-free, affordable and safe large-scale production electric vehicle.

"A considerable amount of research and development work still has to be carried out until we can produce the electric vehicle, in the field of lithium-ion battery technology in particular and this is an area in which the Volkswagen Group is working with further potential technological partners alongside Toshiba," said VW Chairman Martin Winterkorn.

Volkswagen has already demonstrated it is capable of producing highly efficient hybrid vehicles, though the market is not yet ready to pay the price premium for the technology. No time frame for the development or release of the planned electric vehicle has been announced.