HEFEI -- German carmaker Volkswagen will pilot its autonomous-driving travel service in China as the first license plate for road tests was issued to the company on Wednesday.

The road testing is scheduled in September this year in Haiheng Community of Hefei, capital of East China's Anhui province, aimed at optimizing user experience, according to Volkswagen Group China.

The testing area covers 16 square km, with a total road length of 80 km, along which the vehicles are expected to pass by schools, shops, parks, hospitals and residential communities.

Volkswagen plans to test the first batch of 10 autonomous-driving electric vehicles with passengers on board in early 2021. Some 400,000 residents in the area will be able to hail a self-driving car using a mobile app.

Weiming Soh, executive vice-president of Volkswagen Group China, said the integration of the company's software and hardware technologies has enabled Volkswagen to provide autonomous-driving travel service to customers.

"The pilot project is not only a major cooperation agreement between Hefei and Volkswagen but also a milestone in Hefei's development of smart city and its intelligent-connected vehicle industry," said Wang Wensong, vice mayor of Hefei.

In May this year, Volkswagen announced that it would invest around 2.1 billion euros ($2.5 billion) in electric mobility in China. Of the total investment, 1 billion euros will be used to raise Volkswagen's stake in the e-mobility joint venture with Chinese JAC Motors from 50 percent to 75 percent and to acquire a 50 percent stake in JAC's parent company JAG.

In another deal, Volkswagen would pump the remaining 1.1 billion euros into Gotion High-tech Co Ltd, a Hefei-based manufacturer of electric batteries, becoming the latter's largest shareholder.