You can't drive VW's dream car

July 2, 2013: 8:42 AM ET

The XL1 is a stunning rocket ship that gets 261 miles to the gallon. Too bad you won't be driving it anytime soon.

By Doron Levin, contributor

Vroom.

Vroom.

FORTUNE -- Don't look for TV advertisements of Volkswagen's XL1 "supercar." The technology-rich model isn't meant for consumers, not even rich Hollywood types who might, in any case, squawk about the noisy ceramic brakes or the unimpressive pickup. The gullwing doors and the claim of 261 miles per gallon of fuel consumed by XL1's plug-in diesel hybrid engine, impressive as they are, wouldn't be sufficient to make believers of Jay Leno or Larry David.

But make no mistake, the rocket ship-like XL1 is a brawny statement by Wolfsburg, Germany-based VW. It's the outgrowth of a pet project started more than a decade ago by Ferdnand Piech, the automaker's chairman, to prove his company could build a vehicle meeting conventional safety standards that can achieve 100 kilometers an a liter of fuel.

The car's triumphal presentation to the world automotive press—and eventually to 250 handpicked German consumers illustrates the 76-year-old Piech's enduring influence over VW's management. Many of the technologies, such as the liberal use of carbon fiber, might make be used for other VWs, helping to make them lighter and more efficient. Piech serves as chairman of VW's supervisory board; Martin Winterkorn, his protégé, is CEO.

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Looking at the XL1, one can't help but think of VW's open and transparent push to be No. 1 automaker globally by 2018, in terms of sales. It may not get there, but not because of too little determination from its 35,000 engineers worldwide or too little audacity from its executive suite.

"We might use such an engine on other models," says Ulrich Hackenberg, VW's head of research and development about the 0.8-liter two cylinder power plant. Small, light, efficient city cars like VW's Up! will reinforce the German automaker's sales total. It most likely will tussle for leadership against Toyota (TM), an automaker that's learned the hard way that No. 1 status can be a poisoned chalice.

Weighing about 1,750 pounds, the XL1 features nifty high-tech touches, such as closed circuit television whose screens replace the conventional right and left rear-view mirrors. It took a few moments to get used to looking at the screens instead of the mirrors—Hackenberg said the costly technology will get progressively cheaper, allowing VW to use it on other models.

Hackenberg noted that VW is learning from the XL1, how to reduce cycle times for fabricating parts and components from carbon fiber for example. Until now, stamping metal has been much quicker, rendering carbon fiber impractical despite its strength and lightness.

Not meant to be speedy, the XL1 nevertheless can reach 99 miles per hour, thought acceleration to 62 miles per hour is a relatively laid back 12.7 seconds. Regenerative braking returns power to the lithium-ion battery. (The XL1's design recalls Honda's (HMC) early but slow-selling Insight hybrid.)

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This is the fourth iteration of a super-efficient car ordered by Piech. VW designed the first version of the narrow two-seater with the passenger sitting behind the driver. This one retains a flavor of the original, the passenger seated to the side and slightly behind the driver, allowing the car's body to be extra narrow and aerodynamic.

The 250 lucky recipients of XL1 will be surveyed and polled meticulously by VW to learn what they like and don't about the car. Automobile, the enthusiast magazine, says that VW is thinking about using the design for a sports sedan.

However VW uses the knowledge and experience gained from the XL1, the automaker will likely be studied by the rest of the automotive world, just as Toyota was at the end of the last century. Ferdnand Piech wouldn't have it any other way.

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