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Audi engineers and designers have been given the green light to produce the E1 – a super-efficient small car that, at least in spirit, replaces the discontinued, slow-selling A2 city car. The unnamed Audi would go up against the new Ford Ka and the Fiat 500, and we’ve received renderings of the upcoming Audi E1 city car based on the Volkswagen Up! concept car.
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Audi’s new small car is reportedly capable of 95 mpg and fewer than 100 g/km, which would put the car in the lowest possible tax brackets in Europe. Engines are speculated to be a pair of two-cylinder, 600cc turbocharged units, one powered by diesel and the other by unleaded. An all-electric version has already been given the go-ahead as well.

We expect the E1 city car to be front-wheel-drive and front-engined, unlike the smaller Smart ForTwo. Like the Smart ForTwo, the Audi E1 will feature a 2+1 layout that will seat two adults in the front, and room for luggage and a child in the rear.

Initially, sales in North America aren’t very likely, though Audi might test the waters in Canada – a market prone to purchase small cars – and then import the car to the United States. But this is all unconfirmed speculation.

In these renderings, the Audi design cues are obvious. The city car does feature a heavily raked front windshield and a large c-pillar. The hood is tall to cover the engine as well as to meet strict European pedestrian safety requirements.