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.

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.