This is the "Naturmobil", developed by an Iranian engineer called Hadi Mirhejazi.
All jokes about a "one horsepower vehicle" were exhausted in the press coverage when this appeared in 2009, so I won't attempt any more.
The drive system is a horse-electric hybrid. The horse walks on the treadmill in the back of the vehicle, and this drives a generator which charges a battery set. I understand that the vehicle has been clocked at a top speed of 28 mph.