Diess intends for VW to overtake Tesla and become the world's No. 1 electric-car maker by 2025, building on its bigger product offering covering luxury and premium cars as well as volume brands.
VW Group delivered 452,000 EVs globally last year and aims for half of its global output to be full-electric by 2030.
The automaker plans to build 800,000 fully electric cars worldwide this year and 1.3 million in 2023, it said on Thursday.
VW's prices may need to increase further this year amid rising raw material costs, procurement chief Murat Aksel said.
Diess also said he thought the timing was ideal for an initial public offering of sports-car brand Porsche, which is planned for the fourth quarter of this year.
A final decision on whether Porsche would enter Formula 1 was still outstanding, the brand's chief Oliver Blume said.
VW said in April that it and the Porsche and Audi brands were open to entering the international racing class, but Diess said last week there were some divisions among the board but that the brands had ultimately made the case for the move.