Volkswagen has announced that its XL1 will head to production as the most fuel-efficient production car in the world, with a European combined fuel consumption rating of 261 mpg. Thanks to its plug-in hybrid system, this two-seat vehicle can also cover up to 32 miles as a zero-emissions vehicle in all-electric mode.

The XL1 follows pure sports-car design principles: light weight (1953 lbs), exceptional aerodynamics (Cd 0.19), and a low center of gravity. This super-efficient Volkswagen thus has the ability to cruise down the road at a constant 62 mph while using just 8.3 horsepower. In all-electric mode, the XL1 requires less than 0.1 kWh to cover more than a kilometer.

The XL1 emits just 21 g/km of CO2, thanks to its high-tech lightweight design, aerodynamic efficiency, and a plug-in hybrid system consisting of a 47-hp two-cylinder TDI engine, a 27-hp electric motor, a 7-speed DSG dual-clutch automatic transmission, and a lithium-ion battery. The 261 mpg fuel consumption figure is a record that has not been achieved by any other vehicle to date, showing that Volkswagen is redefining what is technically feasible in the automotive industry. The XL1 also has a top speed of 99mph and can accelerate from 0 to 62mph in 12.7 seconds.

Conceptually, the XL1 represents the third evolutionary stage of Volkswagen's 1-liter car strategy. Ferdinand Piech, currently chairman of the Supervisory Board of Volkswagen AG, formulated the visionary goal of putting into production a practical car that had combined fuel consumption of one liter per 100 km (235 mpg). In the two-seat XL1, this vision has become reality.

Despite the tremendous efficiency of the XL1, the engineers and designers successfully came up with a body design which delivers more everyday utility than the two previous prototypes. In the L1, the 1-liter car that was shown in 2002 and 2009, the driver and passenger sat in a tandem arrangement for optimal aerodynamics; in the XL1, the two occupants sit slightly offset, side by side, almost like a conventional vehicle.

The XL1 is 153.1 inches long, 65.6 in wide, and just 45.4 in tall. By comparison, a Volkswagen Polo is slightly longer (156.3 in) and wider (66.2 in), but is significantly taller (57.6 in). Even a purebred sports car like today's Porsche Boxster is 5.1 inches taller. The XL1 certainly promises to look spectacular going down the highway.

Volkswagen said it will produce the XL1 at its Osnabruck plant in Germany, using carbon fiber technology and "hand-crafted production methods," implying limited production and a likely lofty price tag.