Car sharing can be seen as a partial solution for decrease of congestion in cities. For achieving such goal, not only car sharing could be a solution, but vehicle used in car sharing system shall match specific requirements. One of such requirements is the optimum size of the vehicle, which shall not occupy same space as current vehicles in all driving situations – when parked or when driving at maximum city speeds. Therefore, the vehicle has to be short enough to fit in a single parking space width, and narrow enough to fit two vehicles in single driving lane one next to another. Design of the vehicle has to implement some folding-like mechanism, which would allow shortening overall vehicle’s length when parked but will not negatively influence vehicle’s stability when driving. Perform a literature research aiming on visions of small city vehicles including but not limited to powertrain, package, driving specifics and suspension design. Design a concept of rear driven suspension powered by an electric motor with focus on i.e. folding the vehicle into smaller parking space, while maintaining acceptable driving characteristics in speeds up to 100 km/h. This thesis consists of research on small city vehicles and prototypes, calculations of longitudinal dynamics of a vehicle and design calculations of a foldable rear suspension system. It also includes a CAD model of the rear suspension made in Catia V5 and dynamic tests in CarMaker.