We’ve heard rumors of it before but Audi’s Peter Schwarzenbauer has now confirmed that Audi will indeed launch a dedicated small electric city car that will most likely be based on the Volkswagen Up! concept.

The electric-car, which Schwarzenbauer confirmed will not be based on the A1, will be a competitor to the upcoming dedicated Lexus hybrid model. A concept version of the Lexus hybrid model will make its debut at the 2009 Detroit Auto Show.

Rumors suggest that the Audi electric-car will arrive on the market by 2011. It is not yet confirmed whether the car will be a fully-electric or a range-extender like the Chevy Volt.

Source: AutoCar