Power was delivered to the front wheels from a transversely mounted air-cooled twin cylinder two-stroke engine with a horizontal-flow Solex 30 BFRH carburetor.

[2] The car was fueled using "regular" grade petrol/gasoline, mixed in the ratio of 25:1 with oil,[2] reflecting the requirements of the "motorbike-style" two-stroke engine.

When driven normally the Lloyd 300 consumed fuel significantly more frugally than West Germany's best selling small car, the Volkswagen.

[2] Borgward had contracted out the development of the engine and transmission package to a firm called "INKA" (Ingenieurs- und Konstruktionsarbeitsgemeinschaft) in Hude.

The INKA engineers had previously been employed by Auto Union, the Zwickau based conglomerate that had produced a succession of technically innovative and commercially successful DKW branded small cars during the 1930s, and the similarities between the basic architecture and technical solutions employed by the Lloyd 300 and those of the prewar DKW F8 was impossible to miss.

From the driver's seat, it was clear that no attempt had been made to conceal the way that details such as the gear lever and dashboard layout had been modelled on earlier DKW designs.

[3] Timber frame construction, which built on skills developed in nineteenth century carriage manufacturing, had been common in the 1920s, and manufacturers of small inexpensive cars not wishing to invest in costly presses and dies for stamping out steel body panels, notably DKW, had persisted with the technique and refined it through the 1930s.

By the 1950s, however, some thought it anachronistic and the Lloyd 300 quickly acquired the soubriquet "Leukoplastbomber",[4] an essentially untranslatable term referring to its "cute" shape and the "plasticky" character of the car's synthetic leather skin.