Volkswagen has poached back the former chief executive of Continental for a newly created post to oversee the development of electric engines, highlighting the rapidly increasing importance of zero-emission vehicles for the industry.

Karl-Thomas Neumann will start in December as head of electric mobility and group chief officer, reporting directly to VW chief executive Martin Winterkorn, Europe’s largest carmaker said on Wednesday.

“The electric traction is a crucial technology for the Volkswagen group and offers enormous potential,” Mr Winterkorn said.

Mr Neumann’s move marks a quick comeback to the car industry. The 48-year-old manager left Continental this September after a dispute with the Schaeffler family, the car parts maker’s majority owner. He received a €7.4m ($11.1m) pay-off, after leading Continental for less than a year. He became the second chief executive to throw in the towel since Schaeffler took control of the car parts maker in the summer of 2008.

Mr Neumann is a specialist in electronic car components and was head of electronics for the VW brand before joining Continental in 2004.

Mr Winterkorn described him as an “excellent expert of the sector”.

Carmakers around the world are competing fiercely to bring electric vehicles to the market as regulation caps carbon dioxide emissions from petrol engines and customers look to buy more “green” products.

VW has been less optimistic than its rivals in forecasts for electric cars, estimating that they would have a global market share of 1.5 to 2 per cent by 2020. Other carmakers have suggested that up to 15 per cent of global sales in the industry could by then come from electric cars.

Mr Winterkorn said recently the electric car had to be driven “from the eco niche to the mass market”.

“It does not matter who will be the quickest in this market, but who will have the most solid and safest technology,” he said.

The decision to rehire Mr Neumann came as VW’s supervisory board was locked in a special meeting on Wednesday night. People close to the situation said the board was debating further details of the planned acquisition of Porsche.

VW wants to buy a 49.9 per cent stake in the sports car maker for €3.9bn by the end of the year, as a first step towards a full merger with Porsche by 2011. On December 3, VW will seek approval from shareholders for a more than €4bn increase of its preference share capital to fund the deal.