The Ward’s 10 Best Engines competition celebrates 15 years of recognizing outstanding powertrain development. In this latest installment of the 2009 series, Ward’s looks at the evolution of Audi’s potent 2.0L turbocharged I-4.

The history of Audi AG’s mighty mite I-4 goes back to the early ’90s with development of the 1.8L turbo-four (dubbed 1.8T) that arrived on U.S. shores in 1996 in the ’97 A4 compact sedan.

According to Mark Trahan, Audi of America’s director-aftersales and technical service, the engine was designed in Ingolstadt, Germany, by a relatively small engineering team and intended to be shared across a variety of Volkswagen Group products, including Skodas and SEATs.

That 1.8T was upgraded for ’01 models to meet U.S. ultra-low emissions vehicle standards, and its output increased to 170 hp and 166 lb.-ft. (225 Nm) of torque from the first generation’s 150 hp and 155 lb.-ft. (210 Nm).

While its global applications – naturally aspirated and turbocharged – continued to proliferate, it remained turbo-only in North America, offered in Audi’s A4 and VW’s Jetta and GTI, while a higher-output 225-hp version was available in the Audi TT sports car.

Arriving in 2004 for ’05 A3 and A4 models, the third iteration grew to 2.0L and generated 200 hp and 207 lb.-ft. (281 Nm) of torque. Based on the same architecture, it was “pretty much a new engine with a lot of new features,” Trahan says. “And it was easier to manufacture.”

Most significant among those new features was the industry’s first marriage of gasoline direct injection (Audi calls it “FSI” for “fuel straight injection”) and turbocharging.

It also got a vibration-damping balance shaft, a timing belt designed to last the life of the engine and a clever new method of attaching the manifolds to the head with fewer fasteners but better clamping capability. And it garnered Ward’s 10 Best Engines awards for three straight years.

That brings us to its fourth iteration. Extending the Best Engines winning streak to four is today’s 2.0L TFSI, which debuted in ’09 A4 models and was tested by Ward’s editors in the A4 Avant S-line wagon.

It gets dual balance shafts and a new chain that drives them, the camshafts, oil pump and other ancillaries. More importantly, it boasts efficiency enhancing variable-lift on its exhaust valves, and its turbocharger and electronic controls are further optimized.

That begs the question of whether VW and its Audi subsidiary, each with separate engine groups, might sometimes duplicate efforts by working on similar projects. “We try to avoid that,” Trahan says. “There is a little overlap, but it allows us to come up with more individualized applications.”

Audi I-4s always have been used in a variety of VW products, while VW’s narrow-angle V-6 powers transverse-engine Audi applications. Engineers’ top design priority for the 2.0L TFSI was achieving optimum balance of efficiency and muscle.

“They wanted 4-cylinder efficiency with 6-cylinder performance,” Trahan says. “One way to do that is with a light multi-valve engine with a long stroke and a small turbocharger. The long stroke provides good torque at the low end; the multiple valves give good breathing for mid-range performance, and the turbo helps fill the hole at the top end.”

He points out that each of this engine’s four iterations – from the first 1.8T to the second 1.8T to the 2.0L FSI to this new 2.0L variable-valve-lift TFSI – has offered more power and torque and increased efficiency.

For example, the 170-hp Gen II 1.8T was rated at 19/27 mpg city/highway (12-8.7 L/100 km) in the ’01 manual-transmission A4, while today’s 211-hp 2.0L TFSI provides 23/30 mpg (10-8 L/100 km) in the larger A4 sedan with automatic.

By comparison, Acura’s port-injected 4-cyl. front-wheel-drive TSX generates 201 hp and just 170 lb.-ft. (231 Nm) of torque while offering slightly lower 21/30 mpg (11-8 L/100 km) with automatic transmission.

Among the A4’s 6-cyl. rear-wheel-drive competitors, BMW AG’s 230-hp, 200-lb.-ft. (271-Nm) 3.0L 328i rates 18/28 mpg (13-8.4 L/100 km) with standard 6-speed manual, and Cadillac’s 304-hp, 273-lb.-ft. (343-Nm) 3.6L DGI V-6 CTS gets 17/26 mpg (14-9 L/100 km) with automatic.

Other design priorities? “Refinement,” Trahan says. “We’ve gone from one balance shaft to two, and we’ve done a lot to reduce reciprocating mass. Manufacturability and quality – making it easier to build and more reliable – also have been important objectives.”

But this engine’s key competitive advantage over most I-4s is its specific output (horsepower per liter of displacement) given its impressive fuel efficiency.

“That’s brought about by the combination of FSI and high-end turbocharging technology,” Trahan says. “We’ve had direct injection on virtually all our engines (80% or better) since 2004, and we were first to marry turbocharging to it. That separates us. I don’t think many others have that right now.”

Trahan also lauds Audi’s high-tech component set, including its water-cooled BorgWarner Inc. turbochargers and sophisticated algorithms for electronically controlling boost. “We’ve even got a U.S.-market 2.0L TFSI that generates 265 hp. I’m driving one right now in a TTS.”

General Motors Corp. has a DGI 2.0L turbo 4-cyl. that puts out 260 hp and 260 lb.-ft. (353 Nm) of torque. It was introduced in 2006 in the high-performance Pontiac Solstice GXP and Saturn Sky Red Line roadsters and also powers the Chevrolet Cobalt SS compact coupe and HHR SS retro cross/utility vehicle.

Even though some of those GM vehicles are expected to be phased out as part of restructuring, potent turbocharged I-4 DI engines are expected to proliferate to more mainstream GM applications in the near future, while Ford’s turbocharged DI EcoBoost I-4s and V-6s are coming soon as well.

How can this award-winning engine continue to improve as federal fuel-economy requirements accelerate? Further friction reduction and control algorithm development will contribute incremental gains, Trahan says, conceding that some performance might have to be sacrificed a few years further down the corporate average fuel economy road.

“The beauty of FSI technology is that you can tune it to deliver all your gains in fuel efficiency or all your gains in performance. With every development, we have those conflicting objectives in mind, and we try to straddle the balance for equivalent improvements in both. If we were forced into it, we could put all our efforts into improving efficiency while keeping performance where it is, or even taking away a little performance. But we’re not there yet.”

Trahan says Audi will continue to proliferate I-4s and in some cases replace larger V-6s as CAFE requirements toughen in future years.

“The strategy of downsizing, providing the same or better power and torque with smaller-displacement engines and ‘downspeeding’ – moving the torque curve lower in the rev range and using longer gear ratios to let the engine rev lower at a given vehicle speed – will be seen more and more.”

Trahan confirms we’ll see this trend soon in the A5 Coupe and Cabriolet, which so far have been V-6 only, and adds that Audi is “exploring the possibility of using it in some larger cars.” Perhaps not in big A8 sedans for a while, but a 2.0L TFSI-powered mid-range A6 would make sense for the North American market.

“If this is the future,” says Ward’s AutoWorld Editor-in-Chief Drew Winter after testing this grin-inducing 2.0L turbo four in the ’09 A4 Avant, “I’m on board.”