The award, introduced in 2007 as part of the 34 year-old Golden Steering Wheel awards, is one of the biggest honours from the motoring press in Germany.
Peugeot’s iOn, named an urban mobility solution by the manufacturer, won the title ahead of twenty other low-CO2 vehicles.
The four-door iOn impressed because of its small, city-friendly dimensions, electric powertrain and high level of safety equipment.
Designed to run on electric power alone, the Peugeot iOn has a range of 93 miles and can be fully charged via a standard electrical socket in six hours. With a fast charge station, it can be charged up to 80 per cent in just 30 minutes.
The trophy was presented to Jean-Marc Gales, Vice President, Brands PSA Peugeot Citroën: “We are very proud to have won the Grünes Lenkrad, which recognises Peugeot’s expertise and commitment to developing automotive emission reduction technology.
"The Diesel Particulate Filter (FAP) introduced in 2000, the all electric Peugeot i0n this year and Hybrid4 Diesel Hybrid technology, a world first when it is launched next year are all examples of this commitment."
The Peugeot iOn mobility solution will go on sale in the UK from January 2011, but it will only be available on a four-year lease at £415 a month.
The lease covers warranty for the vehicle, battery and powertrain as well as servicing and maintenance.
A rebadged version, the Citroen C-Zero, will be sold outright in the UK in 2011.