The XL1 is based on a 12-year old vision of VW Chairman Piech (Photo: VW)

Volkswagen said it will build the 1 liter XL1 plug-in hybrid, a pet project of its chairman, Ferdinand Piech,

The car, first shown at the Qatar auto show in January, 2011, is based on a 12-year-old concept that set out to prove that an ultra-fuel-efficient model could be built. The aerodynamically styled XL1, which will be handcrafted at a VW factory in Osnabrueck, Germany, will have a combined fuel consumption of 0.9 liters per 100km.

The two-seat XL1, which will weigh only 795 kilos, will be able to cover 50km in all-electric mode. Next to its electric motor, it willhave a two-cylinder TDI engine that will provide a top speed of 160km/hour and 0-to-100km acceleration of 12.7 seconds. Its rated CO2 emission is 21 g/km, VW said in a press release.

The XL1 "illustrates how Volkswagen is redefining what is technically feasible in carmaking," the company said.