Imagine a car you could drive from Los Angeles to New York with 15 gallons of liquid fuel. The cost of the trip would be about $50. You'd spend more than that to feed yourself along the way. That sounds crazy and impossible, but it isn't.

It's not a car from some mad scientist on a remote island. It comes from the world's third largest automotive group: Volkswagen. And it's not new. It was built in 2002. Its fuel consumption is real. It has been measured at 235 MPG, which translates into one-liter-per-100-km, and that's the name of the car, the Volkswagen One-Liter. What prevents Volkswagen from putting it into production is that this technological wonder is hugely expensive to make. A carbon-fiber body, magnesium suspension parts, a custom-made 8.5-hp one-cylinder 0.3-liter diesel engine with an aluminum block. All of its components are made of titanium alloys, as are the wheel hubs. That One-Liter car would be as expensive to make as a 250-mph Bugatti Veyron.

If the One-liter looks fantastic, like a spaceship a wheels—people would go mad to see this on the street—it would be a nightmare in daily use. The top of the car is below your waistline. Ingress/egress is difficult, and there's no trunk. Finally, performance is very poor, with a 74-mph top speed and the acceleration of a moped. So Volkswagen made the most reasonable decision: to consider this concept from a starting point from which it could develop a car that would still be super-efficient, but more user-friendly. That brought the L1, which was the star of the Frankfurt motor show in 2009.

It still had a carbon-fiber body, but its engine was a derivative of a production unit, the 1.6-liter diesel that powers millions of cars all over in Europe. It's a 4-cylinder that has been cut in half, hence a twin: a 0.8-liter 2-cylinder diesel, making 27 horsepower. That's far from exciting, but that diesel is not alone to power the car, because the L1 is a hybrid. It has a small 10 kW electric motor inside its 7-speed twin-clutch automatic transmission.

Together, the power available to the driver jumps to 29 kw (39 hp), giving performance closer to a normal car. Dry weight is 380 kg (838 pounds), whereas the first model was only 290 kg (639 pounds). Official word at the unveiling was that a production model was still several years away, but that Volkswagen was working on it, and that they would do it.

Now With a Plug
The third generation was unveiled last week. It's still a concept, but much closer to a regular car. Called the XL1, there's a big change: It's now a plug-in hybrid.

With a small lithium ion battery, range in electric mode is a 21 miles. This is modest, to my eyes—the relocation of the passenger seat is more important. Past models had the passenger behind the driver, but now it’s side-by-side, which is way better. Actually, the seats are slightly offset to give more elbow and shoulder room for both people. With doors that opens like a Lamborghini, the XL1 is 153-inches long and 66-inches wide and only 45-inches high.

The engine remains the diesel twin, but power is up to 35 kW (48 hp). The electric motor gets stronger too, now giving 20 kW (27 hp), and performance is now at least adequate. Zero-to-62-mph requires 11.9-seconds with a 100 mph electronically limited top speed. That's equivalent to a Honda Insight conventional hybrid. The engine, motor and 7-speed dual clutch transmission are all in the back, only the battery and the radiator are in front. The weight is up considerably, but at 1,753 pounds—you won't find anything with four wheels that's lighter on the road. Most important, the XL1 keeps its super-streamlined body, with a Cd of .186, and with that fantastically efficient hybrid power train, Volkswagen announces an incredible 261-mpg figure.

We should expect the XL1 in 2013, still with a carbon-fiber body, but without all the expensive magnesium and titanium parts to make it affordable. The production version will get more than 150-mpg in normal driving with its batteries discharged. Nothing will come close to it. Volkswagen has said several times said that it wants to be Number One. This is the halo car to do it.

2011 Volkswagen XL1 - Rear

2011 Volkswagen XL1 - Interior

2011 Volkswagen XL1 - Front