It's architecture enables it to make huge amounts of power in a tiny, lightweight package with almost no vibration. On the other hand they weren't particularly efficient and had durability issues early on.
Despite the pitfalls, Mazda has stuck by Felix Wankel's concept since the 1960s. While the last current rotary-powered machine, the Mazda RX-8 will soon cease production, the Wankel has in recent years found favor as a potential range extender in series hybrid vehicles like the +Chevrolet Volt. Audi built a fleet of A1 e-trons with tiny rotaries running a generator and several other companies have experimented with the layout.
For a decade Mazda has also been testing rotaries running on hydrogen. The rotary layout works particularly well with the rapid combustion characteristics of hydrogen. Now Mazda is apparently looking at using a hydrogen-fueled rotary as a range extender. Unlike the Volt, a hydrogen rotary ER-EV would actually be a full time zero-emissions vehicle since burning H2 produces water and no CO2.
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Green Car Congress: Mazda to use hydrogen rotary engine for EV range extender
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