Russia's richest man Mikhail Prokhorov is all set to launch mass production of budget electric car with a target price of USD 12,500.

Prokhorov, ranked by Finans magazine as Russia's richest man with an estimated wealth of $ 14.1 billion in 2008, plans to produce a Golf-class sedan with a target price of about 8,800 euros ($12,500) in partnership with the St Petersburg-based truck maker Yarovit, Kommersant business and political daily reported.

Already blessed by Prime Minister Vladimir Putin the electric car project will be the first of this kind in Russia, which has adopted a plan to switch over to a knowledge-based, innovative economy to end dependence on raw material exports.

Prokhorov, whose business interests range from gold to a US basketball club, sold some of his most attractive assets just before the global economic meltdown struck and is now willing to invest cash in innovative projects.

The daily said that the price of $ 12,500 was too high to compete with foreign auto giants who have already announced plans to produce similar cars with price tag of $ 10,000.