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Volkswagen might build an 80-mpg hybrid hatchback to take on the Prius

Volkswagen shifted its focus from diesel to hybrid and electric powertrains in the wake of the widely publicized Dieselgate scandal. The Wolfsburg-based car maker is developing a modular platform for battery-powered cars, and German media outlets are reporting it’s also in the early stages of designing a plug-in hybrid hatchback aimed squarely at the Toyota Prius and the Hyundai Ioniq.

The model is tentatively called XL3, a name that draws a parallel to the futuristic, ultra-efficient XL1 (pictured) sold in strictly limited numbers in Europe. While the XL1 takes the form of a sleek coupe with room for up to two passengers, the XL3 will launch as a compact four-door hatchback with an aerodynamic silhouette similar to the Prius’ and space for at least four passengers. Its front end will be characterized by C-shaped LED daytime running lights, a styling cue borrowed from the XL1, and blue trim elements.

Power will come from a gasoline-electric plug-in hybrid drivetrain made up of a turbocharged 1.4-liter four-cylinder TSI engine rated at 140 horsepower, and a 35-horsepower electric motor connected to a battery pack. With both power sources running, the XL3 will return approximately 80 mpg in a mixed European cycle. With the turbo four shut off, the hatchback will be capable of driving on electricity alone for relatively short distances.

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Volkswagen has confirmed plans to build more green cars, but it hasn’t commented on rumors of a Prius-fighting model. German magazine Auto Bild believes the hatchback will be presented to the public at a major auto show in 2018, so we could see it appear on our roads in time for the 2019 model year — over two decades after the original Prius was introduced in Japan. In Germany, it will cost about €30,000 (roughly $33,000) before government incentives are factored in.