For years, as Toyota and Honda toiled away at hybrid-electric vehicles, German manufacturers largely ignored electric-drive technology. But times have changed, and last week, Porsche committed to making a production version of what will likely be the world’s fastest plug-in hybrid: a rip-roaring two-seat supercar with a top speed of 198 miles per hour and a zero-to-62-mph acceleration of 3.2 seconds.

The Porsche 918 Spyder was first shown as a concept car at the Geneva Motor Show last March to demonstrate Porsche’s research into battery-powered hybrid powertrains. Its racy styling was combined with the greenest of features: a zero-emissions “E-Drive” mode that gives it up to 16 miles of electric-only range. With some European cities expected to institute emissions-based entrance fees or congestion charges, the 918 Spyder will offer a few rich buyers both supercar performance and environmental peace of mind.

A 3.6-liter V-8 gasoline engine puts out 500 horsepower–with a remarkable maximum 9,000-rpm redline–to drive the rear wheels via a seven-speed direct-shift gearbox. An electric motor between the engine and transmission contributes extra torque as needed. Up front, a pair of electric motors–one per front wheel–provide all-wheel drive. Taken together, the three electric motors add 218 horsepower to the gas engine’s 500. The motors are powered by a 5.1-kilowatt-hour lithium-ion battery pack.

As in most performance cars, the driver can select from various driving modes, with different settings for the software that operates the engine-control, power distribution, and stability-control systems. A “Race Hybrid” mode lets the driver add electric boost as needed to accelerate more quickly out of corners or when overtaking–handy on the fabled Nürburgring circuit, where Porsche’s simulations suggest that the 918 will be a bit quicker than its last supercar, the Carrera GT.

The 918 Spyder is expected to cost around $600,000–several times as much as Tesla Motors’s $109,000 2010 Roadster. But Porsche is also experimenting with all-electric versions of its entry-level Boxster as well. Industry analyst Rebecca Lindland of IHS Automotive says that high-performance hybrids from Porsche, as well as those from Audi and Mercedes-Benz, could pose a challenge to startup electric-vehicle makers.

“This puts tremendous pressure on Tesla and Fisker,” Lindland says. “They’re well-established carmakers with a lot of resources who are suddenly coming in to play in Tesla’s very elite sandbox.”

More broadly, Lindland says, cars like the 918 Spyder show how committed previously skeptical automakers are to dealing with tighter limits on carbon-dioxide emissions and fuel-efficiency requirements.

Mike Omotoso, manager of the power train forecasting group at J.D. Power and Associates, says that some of the technology in Porsche’s 918 Spyder could eventually find its way into other vehicles made by Porsche. It might also end up in cars made by Volkswagen, which owns a controlling interest in Porsche.

Despite its power, Porsche says the 918 Spyder is rated at the equivalent of 78 miles per gallon using European test cycles. As the EPA is learning with the 2011 Chevy Volt range-extended electric vehicle, however, it’s a substantial challenge to provide useful information on a vehicle’s fuel consumption when it depends so much on how it’s used.

Porsche’s first production hybrid vehicle, the 2011 Porsche Cayenne S Hybrid, is now reaching dealers in the U.S. and Europe. The company is also developing the 911 GT3 R Hybrid, a racing car that stores recaptured energy not in a battery but in a flywheel system.