Turbocharged Direct Injection

The engine uses direct injection where a fuel injector sprays directly into the engine cylinder rather than the pre-combustion chamber prevalent in older diesels which used indirect injection. The engine is coupled with a turbocharger and intercooler to increase the amount of air that can get into the engine cylinders, thereby increasing the amount of fuel that can be injected and combusted. In combination, these allow for greater engine performance while also decreasing harmful emissions.

Other companies also use similar technology today, but "TDI" refers to these type engines. Normally-aspirated engines (those without a turbocharger) made by Volkswagen Group use the label "Saugdiesel Direct Injection" (SDI).

The reduced material volume of the direct injection diesel engine reduces heat losses and thereby increases engine efficiency, at the expense of increased combustion noise. A direct injection engine is also easier to start when cold, due to the reduced heat loss of the design.


Fuel

Like all diesel engines, TDI engines can run on petrodiesel or biodiesel. When converted properly, one can be made to also run on straight vegetable oil (SVO) or waste vegetable oil (WVO). Most conversions also make it possible to run on kerosene.

In terms of fuel efficiency, and clean emissions when run on biodiesel or SVO/WVO, TDI engines are among the best on the market. This is often overlooked because they do not drive on gasoline. The common Volkswagen 1.9L TDI, officially gets between 37-57 mpg for the automatic and 42-61 mpg for the 5-speed.

Newer TDI engines, with higher injection pressures, are less forgiving about poor-quality fuel than their 1980s ancestors. No. 2 diesel fuel is recommended since it has a higher cetane number than No. 1 fuel and has lower viscosity (better ability to flow) than heavier fuel oils. Many enthusiasts have converted their TDI cars to run on SVO or WVO by installing devices that pre-heat the oil to lower its viscosity, as the viscosity of unrefined oil is much higher than petrodiesel or biodiesel.

Volkswagen of America does not endorse the use of biodiesel in high percentages. They state that "[s]hould the use of substandard fuels, or higher level blends of biodiesel, damage your engine or fuel system, such damage cannot be covered under warranty." Thus a high-percentage biodiesel user who encounters fuel system problems can reasonably expect difficulty obtaining service under warranty if the biodiesel use is apparent to the dealer.