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The Next Prius?

Peugeot and other automakers are combining diesels and hybrids – and raising the efficiency bar.

Japanese automakers Toyota and Honda Motor launched the hybrid revolution in the 1990s, and their U.S. counterparts are busy following suit. European automakers, however, initially resisted the trend, instead focusing on diesel-powered automobiles whose fuel efficiency rivaled even the best gasoline hybrids.

Now, though, amid rising gas and diesel prices and anxiety over an emerging technology gap with international competitors, European automakers suddenly look set to join the hybrid trend – by combining hybrid technologies with efficient diesel engines, whose air compression and fuel combustion cycles are fundamentally more efficient than the spark-plug cycles in gasoline engines.

Paris-based PSA Peugeot Citroën last month became the first manufacturer to seize the opportunity, promising diesel hybrids in its showrooms starting in 2010. Although PSA declined an interview with Technology Review, last month its CEO, Jean-Martin Folz, predicted in Paris that the diesel hybrid would provide “a true technological rupture.”

PSA is well positioned to tackle diesel hybrid technology. It’s the top manufacturer of advanced “common rail direct injection” diesel engines, which feed fuel through engine valves at high pressure and thereby increase combustion efficiency. The company also produces electric vehicles. And this winter it is touring hybrid versions of its popular Peugeot 307 and Citroën C4 compact diesel cars on the auto-show circuit.

The nonhybrid 307 and C4, built on a common platform, are already among the cleanest and greenest vehicles in their class, consuming just 4.8 liters of diesel fuel per 100 kilometers (49 mpg) in mixed driving. The hybrid versions do much better by supplementing the diesel engines with nickel-metal hydride batteries and electric motors akin to those in the Toyota Prius and in Ford’s Escape hybrid SUV.

The PSA diesel hybrids start on electric power exclusively, avoiding the use of diesel in low-power, low-temperature modes where the engine is least efficient. During braking, the vehicles recover energy by recharging their battery packs. Fuel consumption falls to just 3.4 liters per 100 km (or 69 mpg), setting a record for a European compact family car, and far surpassing the benchmark Prius (which delivers around 50-55 mpg).

Further distinguishing PSA’s diesel hybrids from existing hybrids is a button on the dashboard labeled “ZEV” that enables the driver to put the vehicle into a battery-only, “zero-emissions” mode at speeds up to 50 kilometer per hour. That feature could be handy for drivers navigating the increasing number of European cities that are banning conventional vehicles from their congested downtown streets.

PSA’s diesel hybrids are not alone on the auto-show circuit, though. Last year GM demonstrated a diesel hybrid sedan built at its European International Technical Development Center in Russelsheim, Germany. Ford, which co-produces diesel engines with PSA for its European vehicles, has been testing a diesel hybrid van in the U.K., and unveiled a sporty diesel hybrid at this winter’s auto shows. PSA, however, is the only maker committed to actually producing a diesel hybrid vehicle.

What’s holding back commercialization is cost. A diesel-powered car in Europe already costs $1,750-2,400 more than an equivalent gasoline model, and PSA estimates that making a diesel hybrid could double that premium. Hence, PSA says controlling costs will be a challenge, but it is starting to engineer cost-shaving solutions.

PSA hopes to secure funding from the French government’s newly formed Agency for Industrial Innovation to create a consortium of manufacturers and research labs dedicated to slashing the cost of producing its diesel hybrid. French President Jacques Chirac last month endorsed that goal, but funding is still up in the air.

Meanwhile, Renault, PSA’s domestic rival, is one of the last hybrid holdouts. Renault partner Nissan is licensing Toyota’s hybrid system to produce a gas-electric hybrid version of its Altima sedan next year, but neither Renault nor Nissan has committed fully to the technology. At the Tokyo Motor Show last fall, Carlos Ghosn, CEO of both companies, called the hybrid a serious technological option, but also warned that the industry “must be careful not to impose expensive solutions until consumers are ready to adopt them.”

What’s clear is that diesel hybrid technology has significant potential. According to a 2003 study by MIT’s Laboratory for Energy and the Environment, a study that remains one of the most comprehensive projections for propulsion technologies, diesel hybrids should outperform nearly all other propulsion technologies through 2020 – including fuel-cell cars that run on hydrogen derived onboard from gasoline. Fuel cells using pure hydrogen offered a marginal benefit in efficiency, but only when combined with hybrid technology, and at a significantly higher price. Other research programs have demonstrated that diesel hybrids can deliver efficiencies of 80 mpg and up.

If diesel hybrids do succeed in Europe, could they make it in the United States? Until recently, that would have seemed unlikely. With diesel’s dirtier fuel and with tighter U.S. pollution controls, diesels have been a tough sell stateside. Although they account for half of all cars sold in Europe, that figure is just 3 percent in the U.S. market.

But diesel’s fortunes could improve quickly in the United States. Federal regulations mandate the phasing in of cleaner diesel fuels starting this year. And pollution controls such as particle filters are getting cheaper, as they become standard equipment in Europe (PSA alone has placed more than one million filters on its European diesels). Clean diesels that employ such devices may qualify for the same federal tax credits that make hybrid cars a good buy in the United States.

Anthony Pratt, who tracks hybrid vehicles markets as senior manager at Global Powertrain for J.D. Power and Associates in Westlake Village, CA, says he anticipates that hybrid diesels will hit the U.S. market after 2009, but have a limited appeal because of their higher price tags. “This technology will likely be utilized in a luxury brand with a high base price,” Pratt says. “Luxury buyers have more disposable income and will not be looking for an economic payback from the vehicle.”

Peter Fairley is a Technology Review contributing writer based in Paris.

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