More expensive than their gasoline counterparts,  diesel engines deliver significantly better fuel economy and are vouched for by taxi drivers the world over.   Some 15 years ago, Toyota and Honda introduced the world to the hybrid drive car, adding an electric motor and a large battery, making stop-start driving more efficient by storing and reusing kinetic energy.

With both technologies established, it was then logical to think about combining the two to make an even more efficient drivetrain, but the double premium (both diesel and hybrid drives are more expensive than conventional gasoline models) made OEMs think that the incremental cost was too much for the market even though the long-term benefits would be very attractive.   Finally, PSA in France decided at the end of 2011 that the time was right and launched its Hybrid4 system, first in the Peugeot 3008, followed by the new Citroën DS5, and then in the Peugeot 508.  In this system, the diesel engine drives the front wheels while the electric motor drives the rear wheels.  A choice of four different modes allows the driver to choose when to use the technology: to be clean, frugal, 4WD, or sporty.  More importantly, the official emissions figure of 91 g/km of CO₂ and 80 mpg (Peugeot 3008 Hybrid4 Active model) makes the vehicle attractive to both individual and company car buyers in many European countries, thanks to taxation policies that emphasize fuel efficiency.

PSA’s Hybrid4 technology uses a 1.1 kWh NiMH battery pack that gives an electric-only range of about 2.5 miles.  The premium for hybrid drive on the 3008 is £4,200 ($6,700), or about 18% extra.   The Peugeot 508 with Hybrid4 drive retails at £31,450 ($50,100), which represents a premium of about £7,000 ($11,150) over the non-hybrid version.

The only other production announcement has come from Volvo, which takes things up a notch by including a much bigger battery and the ability to recharge it without the engine.  With a Li-ion battery pack rated at 11.2 kWh, the upcoming V60 diesel hybrid will be capable of about 30 electric-only miles.  On average, the V60 Hybrid official fuel economy is 148.6 mpg and it emits 49 g/km of CO₂.

The Price Premium

It’s interesting to note that Volvo chose to use a similar architecture to the PSA design, with the diesel engine driving the front wheels and the electric motor driving the rear.  Again, the driver gets to choose driving mode, in this case from Pure, Hybrid, and Power.  There’s also a ‘Save’ button that prevents the electric drive from being used and saves battery power in advance of entering a low emission zone where all-electric mode is best.

Volvo made its announcement just as PSA was bringing its diesel hybrid to the market, and there has been some fanfare about the first-year production run of 1,000 units being sold out, so it must be worth the £47,000 ($74,900) price tag to the European early adopters.  That is £12,780 ($20,400) more than the R-Lux version of the V60 with the same diesel engine, an increment of about 37%.  These numbers are softened in some markets where rebates and government incentives apply; for example in the United Kingdom, PHEV and EV buyers get a £5,000 ($8,000) rebate from the government.

So the diesel hybrid is finally with us and showing solid, if not spectacular, sales performance in its first year of production.  Both companies have chosen a design that appeals to buyers thinking about an electric vehicle but concerned that it will not meet all their needs and would only be practical as a second vehicle.

The popularity of the diesel engine in Europe will work in favor of this new flavor of hybrid, especially with its tax advantages and significant economy improvements.  Accounting for the total cost of ownership, eliminating congestion charges, and low or zero annual registration costs, it probably will be a cost-effective alternative to a similarly-priced conventional vehicle.  Also, OEMs know that most people decide to buy a new car based on their financial calculations, and then justify the purchase to other people in terms of saving the planet.  The diesel hybrid can do both without sacrificing performance or functionality.