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Mind you, they have much more lax emissions requirements, as a motorcycle.
They only have to meet the emissions requirements of a mid 1990s car, really.
I would be completely unsurprised if they completely skip durability testing, though, and launch a total lemon.
As far as actually sourcing an engine to do what they want... the problem is that most of what's on the market (anywhere in the world in current production) likely doesn't quite meet their needs. They seem to want about the output of a Geo Metro's 1.0 (55 hp, 55 ft-lbs) based on what they've been advertising, and minimum necessary displacement, with very low cost and both manual and automatic options. Let's see here...
Kei car engines: ~50-55 hp for a 660 cc NA engine, but lacking in torque, and most of the automatics are CVTs. 63 hp for a 660 cc turbo engine and plenty of torque, but cost is an issue, and the same CVT issue. And, most of these are DOHC == more cost.
Smart ForTwo engine: 75 hp and decent torque, but 1000 cc (bigger than they seem to want), the only transmission choice is dreadful. And it requires premium gas. I forget if this is SOHC or DOHC.
Ford Fox engine: 60 and 85 hp trims, IIRC, for non-turbo, decent torque, but possibly heavier than they want, and cost may be an issue. And it's a 1000 cc engine, too. And the transmission choices are a decent manual and the problematic PowerShift double-clutch box (expensive, too).
VW EA111 1.0: 60 and 75 hp trims, again we're talking about 1000 cc. Transmission choices are a 5-speed manual and a single-clutch automated 5-speed (aka, crap).
The problem is that all the 800 cc engines I can find are a bit weak for what they want, and they seem to want less than 1000 cc. It could also be that other companies don't want to work with them for whatever reason, too...
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