We looked at a TDI as a replacement for one of our CDI smart cars a couple years back when we though we might need 4 seats again. That need changed and we stayed with the CDI until this year. However we were surprised to see the really low EPA numbers mileage numbers on the TDI's when we were looking. We were in California at the time and it seemed to me they were in the low 30's. I think real world mileage is higher for the TDI's although I don't know how much.
We again looked at VW this year when we decided to replace our oldest CDI with a full electric. We were surprised that although the internet has advertising for a full electric E golf we could find no dealer that knew anything about them or that could sell them. We narrowed our choices to the Leaf or the Smart ED and went with the Smart. Easily the best car we have ever driven and we have all but stopped using our CDI except for my work commute. A little concerned with that as short runs are not great for my little CDI diesel.
I would think VW is going to have to get into the Electric market in a more serious way if they want to give an alternative to those looking for a short to medium range commuter that doesn't cost much to fuel and has a small eco-footprint. I suspect that many will be looking at the TDi with a very wary eye now.