Volkswagen wants to make self-driving cars a commercial reality by the middle of the next decade, the German carmaker said on Wednesday.

Tests have been carried out in Hamburg using five specially-equipped electric Golf models on a 3-kilometre route, which has ‘road side units’ at 14 traffic lights to aid the vehicles.

The cars, which have sensors on the roof, in the fenders and in the front and rear, can so far predict the traffic situation for 10 seconds.

‘We are working on a market-ready self-propelled system, which we want to commercialize as early as the middle of the next decade,’ Alexander Hitzinger, VW's vice president for autonomous driving, told reporters in Germany's second-largest city.

But fully autonomous driving on a grand scale - with more than 100,000 vehicles - is ‘a Herculean task,’ he added.

For example, there is an infinite number of traffic scenarios and not all can be covered by algorithms while the systems also have to be able to ward off possible cyber attacks.

VW, which is cooperating with US manufacturer Ford, believes China and the US will become pioneer markets for self-driving cars but that it will be difficult in Europe to define legal frameworks. Taxis and delivery vehicles are expected to be among the first wave.

Another problem for the industry is the availability of lithium batteries needed for electric vehicles, which the vast majority of self-driving cars are expected to be.

The German Economics Ministry spoke of its ‘surprise and regret’ on Wednesday at the cancellation of a German-Bolivian joint venture for the production of lithium.

The project between Germany's ACI Systems and the Bolivian state-owned company YLB was launched just over a year ago, before the Bolivian government recently ended the deal without giving reasons to German authorities.