Will be powered by a 1.4 Liter Turbo engine with 150hp, and an electric motor. They are predicting 45MPG combined. Which is much better than the Diesel version. And better than the all new 2013 Camry Hybrid. A 7 speed DSG is the only transmission available.
Hybrid seem to be more popular in the US than Diesel cars, so it does make sense for VW to offer both. They are also much more efficient around town.
Interestingly enough, a slightly more powerful version of the 1.4 Turbo (around 160hp) will become the base engine in the Jetta and Beetle sometime next year, replacing the 2.5 Liter inline 5)