In 1998, the Volkswagen Group purchased the trademark rights on the former car manufacturer Bugatti in order to revive the brand. Starting with the Bugatti EB118, they presented at various international auto shows a total of four 18-cylinder concept cars. At the 1999 Tokyo Motor Show, the first study of the Veyron was presented. At the time the name of the concept car was "Bugatti Veyron EB 18.4" and it was equipped with a 3-bank W 18-cylinder engine instead of the 2-bank W 16-cylinder engine of the production version. While the three previous prototypes had been styled by Giugiaro, the Veyron was designed by the Volkswagen stylists.

The decision to start production of the car was taken by the Volkswagen Group in 2001. The first roadworthy prototype was completed in August 2003. It is identical except for a few details to the later series variant. In the development to series production, however, considerable technical problems had to be addressed, so that the start of production was delayed repeatedly, until September 2005.

The Veyron EB 16.4 is named in honour of Pierre Veyron, a Bugatti development engineer, test driver and company race driver who, with co-driver Jean-Pierre Wimille, won the 1939 24 hours of Le Mans while driving a Bugatti. The "EB" refers to Bugatti founder Ettore Bugatti and the "16.4" refers to the engines 16 cylinders and four turbochargers.

The Veyron features an 8.0-litre, quad-turbocharged, W16 cylinder engine, equivalent to two narrow-angle V8 engines. Each cylinder has four valves for a total of 64, but the narrow staggered V8 configuration allows two overhead camshafts to drive two banks of cylinders so only four camshafts are needed. The engine is fed by four turbochargers and displaces 7,993 cubic centimetres (487.8 cu in), with a square 86 by 86 mm (3.39 by 3.39 in) bore and stroke.

The Veyrons quad-turbocharged W16 engine

The cars wheelbase is 2,710 mm (106.7 in). Overall length is 4,462 mm (175.7 in) which gives 1,752.6 mm (69.0 in) of overhang. The width is 1,998 mm (78.7 in) and height 1,204 mm (47.4 in). The Bugatti Veyron has a total of ten radiators:The transmission is a dual-clutch direct-shift gearbox computer-controlled automatic with seven gear ratios, with magnesium paddles behind the steering wheel and a shift time of less than 150 milliseconds, built byRicardo of England rather than Borg-Warner, who designed the six speed DSG used in the mainstream Volkswagen Group marques. The Veyron can be driven in either semi-automatic or fully automatic mode. A replacement transmission for the Veyron costs just over US$120,000. It also has permanent all-wheel drive using the Haldex Traction system. It uses special Michelin PAX run-flat tyres, designed specifically to accommodate the Veyrons top speed, and cost US$25,000 per set. The tyres can be mounted on the rims only in France, a service which costs US$70,000. Kerb weight is 1,888 kilograms (4,162 lb). This gives the car a power-to-weight ratio, according to Volkswagen Groups figures, of 446.3 metric horsepower (328 kW; 440 bhp) per ton.

It has a drag coefficient of 0.41 (normal condition) and 0.36 (after lowering to the ground), and a frontal area of 2.07 m² (22.3 sq ft). This gives it a drag area – the combination of drag coefficient and frontal area, represented as C_dA – of 0.74 m² (8.0 sq ft).

According to Volkswagen Group and certified by TÜV Süddeutschland, the final production Veyron engine produces 1,001 metric horsepower (736 kW; 987 bhp) of motive power, and generates 1,250 newton metres (922 lbf·ft) of torque. The nominal figure has been stated by Bugatti officials to be conservative, with the real total being 1,020 metric horsepower (750 kW; 1,006 bhp) or more.

For top speed mode the driver must, while stationary, toggle a special top speed key to the left of the drivers seat. A checklist then establishes whether the car and its driver are ready to attempt to reach 407 km/h (253 mph). If so, the rear spoiler retracts, the front air diffusers shut, and normal 12.5 cm (4.9 in) ground clearance drops to 6.5 cm (2.6 in).

The Veyrons brakes use cross drilled, radially vented carbon fibre reinforced silicon carbide (C/SiC) composite discs, manufactured by SGL Carbon, which have a much greater resistance to brake fade when compared with conventional cast iron discs. The lightweight aluminium alloy monobloc brake calipers are made by AP Racing; the fronts have eight titanium pistons and the rear calipers have six pistons. Bugatti claims maximum deceleration of 1.3 gs on road tyres. As an added safety feature, in the event of brake failure, an anti-lock braking system (ABS) has also been installed on the handbrake.

Prototypes have been subjected to repeated 1.0 g braking from 312 km/h (194 mph) to 80 km/h (50 mph) without fade. With the cars acceleration from 80 km/h (50 mph) to 312 km/h (194 mph), that test can be performed every 22 seconds. At speeds above 200 km/h (120 mph), the rear wing also acts as an airbrake, snapping to a 55° angle in 0.4 seconds once brakes are applied, providing an additional 0.68 g (6.66 m/s²) of deceleration (equivalent to the stopping power of an ordinary hatchback). Bugatti claims the Veyron will brake from 400 km/h (250 mph) to a standstill in less than 10 seconds, though distance covered in this time will be half a kilometre (third of a mile).