The GX3 was first shown at the 2006 Greater Los Angeles Auto Show.

The design of the GX3 was atypical, with a front double wishbone suspension, tubular steel space frame and laminated body panels.

The GX3 lacked a roof or windshield, and was intended mainly for fair weather environments, as a "weekend car".

However, in spite of the positive public response, and intensive chassis development by Lotus Cars for production, Volkswagen later concluded that it would not be able to sell the GX3 without costly, and complex redesigns that would alienate Volkswagen's target market and increase price above the proposed US$17,000 base price.

[citation needed] The company cited possible safety issues that could have led to product liability lawsuits, and decided that the legal concerns made production as is impossible.