Volkswagen's been toying with hybrids for awhile and got electric-vehicle advocates in a lather over the diesel-electric Golf it unveiled a few months ago. Now the company's promising a plug-in hybrid by 2010 and the German government's written a big check to make it happen.

VW boss Martin Winterkorn says gas and diesel engines will be around for a long time to come, but "the future belongs to all-electric cars." The automaker is staking a claim to that future with a plug-in hybrid drivetrain it calls Twin Drive. It will debut in a Golf fitted with a 122-horsepower diesel engine and an 82-horsepower electric motor.

"While the e-motor on a typical hybrid model just supplements the combustion engine, the exact opposite is true on Twin Drive," Winterkorn said during the car's unveiling in Berlin. "Here the diesel or gasoline engine supplements the e-motor."

Start-stop technology will save power and regenerative braking will help generate it. VW says the car will use lithium-ion batteries and have an all-electric range of 31 miles. The company recently signed a deal with Sanyo to develop li-ion batteries; the electronics company plans to begin production next year and says it will spend $769 million on the effort during the next seven years.

Winterkorn says VW will have a demonstration test fleet of 20 Twin Drive Golfs on the road by 2010, but there's no word yet on whether the car will see production. Still, Germany's Interior Ministry is eager to see plug-in hybrids on the road ASAP, so it's announced a $23.5 million dollar program to help VW and other automakers develop such vehicles within four years. Germany's environmental minister, Sigmar Gabriel, says there could be 1 million hybrids on the road in Germany by 2020 and 10 million a decade after that.

Photos by Volkswagen.