The Volksgrenadier are a unit seen used by the Germans only in the R.U.S.E. Demo. There is no category under the name and bringing up the menu shows no picture. They are armed only with Handguns and Panzerfausts, making them ineffective compared to anything but Russian draft troops. They are behind the German HQ you need to destroy, their information says their factory is the prototype base, however, no German prototype base owns Volksgrenadiers. And, they do not show any description of the unit. And no cost, but it says their warmode is 1939+ (confirmed only on PS3 version), which is contradictory as Prototypes are not available in earlier war modes.
If one translates, the unit would roughly mean 'citizen grenadiers', or civilians with no training being handed weapons by the German military. It is possible they were intended to be included in the original game, likely the Holland Campaign, but were cut out. In reality, the Germans did form Volksgrenadier divisions, which focused on defensive fighting compared to the rest of the German army. These divisions fought in many battles such as the Battle of the Bulge.
The strategic emergency and concomitant manpower shortage resulting from the losses in mid-1944 required the creation of infantry divisions that economized on personnel and emphasized defensive strength over offensive strength. The Volksgrenadier divisions met this need by using only six line infantry battalions instead of the normal nine for infantry divisions — already a common reality for many existing divisions. The units also had a higher proportion of submachineguns and light automatic weapons and thus relied more on short-range firepower than in standard German Army infantry units. Automatic weapons like the new "wonder weapon" Sturmgewehr 44 and anti-tank weaponry like the single shot panzerfaust were also used by Volksgrenadier units.
They were organized around small cadres of hardened veteran soldiers, NCOs and officers and then bulked out with anything the Replacement Army could get its hands on. "Jobless" personnel of the shrinking Kriegsmarine and Luftwaffe, wounded soldiers from broken formations returning to duty from hospitals, older men who would have been considered too old or too unfit for the peacetime army and teenagers were recruited into the ranks.