Potential of Diesel-Hybrids Is Limited by High Cost

Peugeot announced this week that it sold out the first run of its 3008 Hybrid4 Limited Edition diesel-hybrid in just nine days. Is this a sign that hybrids using an efficient diesel engine, instead of a gas engine, are ready for prime time? Not at all.

Yes, a diesel-hybrid can boost fuel-efficiency past the level of today’s most gas-sipping hybrids. In fact, hybrids designed to achieve at least 80 mpg were shown as best-case fuel-efficiency models under the U.S. government’s 1990s program—the Partnership for a New Generation of Vehicles. Those models were never put into production.

Ever since Peugeot unveiled a concept version of the 3008 HYbrid in Paris in 2008, the automaker has said the diesel-hybrid will produce just 99 grams per kilometer of CO2, while delivering 200 horsepower. The car’s 2.0-liter diesel provides 163 horsepower to the front wheels, and an electric motor supplies 37 hp to the rear wheels.

The problem is that diesel-hybrids move the wrong direction down the hybrid cost curve. Toyota, Honda, Ford and others are seeking to reduce the cost of hybrids as a way to deploy the technology to as many models as possible, at the lowest possible cost to consumers.

The next wave of hybrid and electric cars should not be positioned as expensive and exotic vehicles—geared only to the most motivated early adopters. Yet, the Peugeot 3008 HYbrid—a vehicle that measures in length between a Honda Fit and Honda Civic—is selling for about $58,000. With diesel-hybrids, the extra cost of the hybrid system and the diesel system are doubled up. The company sold out in nine days, but the total run of 3008 HYbrids offered in 11 different European countries was 300 units—the same scale as several pilot programs for fuel cell, plug-in hybrid and electric cars.

Peugeot is not alone in talking about future diesel-hybrids. Mitsubishi, Volvo and Daimler have all shown prototypes. Dr. Christian Mohrdieck, Daimler’s director of battery drive development, told HybridCars.com last week that Mercedes will bring a diesel-hybrid market in the next couple of years.

That means we should expect more press releases about new concept diesel-hybrids and low-volume production cars. These should be viewed with interest, but not a lot of hope for a scalable green strategy—especially when viewed next to the hundred of thousands of gas-powered hybrids and the many thousands of electric cars that will be sold in 2011.

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  • caffeinekid

    I have to wonder if the intent of the automotive industry isn’t to string the public along with promises of “affordable” future-forward technology just enough to ensure that they can demand a premium for the limited units they actually produce. $58,000 for ANY Peugeot is just ridiculous. Maybe no one noticed, but the public’s buying power is actually going DOWN not UP. Even $30K is out of the range of most responsible buyers.

  • JamesDavis

    These high prices are to ensure that fossil fuel stays around until they exhaust every bit of it and get the highest price they can and destroy all the ecosystems possible.

    You can probably build three electric vehicles for the same price it takes to build one hybrid and yet electric vehicles cost way more than any hybrid or fossil fuel vehicle. The auto makers know that if you put an overinflated price on hybrids and electrics the greatest majority of Americans will not be able to afford them and ensure the continuation of fossil fuel vehicles and the auto makers have hundreds of excused to justify these overinflated prices.

  • Max Reid

    $58,000 for a small Hybrid is way too much even though its Diesel powered.

    We can buy 1 Prius for 23,000 and a Prius v / + for another 29,000 and still have another 6,000 in hand.

    I think only if Europeans buy a small car, commute by buses / trains and keep their cars for 20-30 years, the the automakers will learn the lesson and reduce the price of Hybrids.

  • Anonymous

    The car looks nice, but they did not mention the km/l or mpg. I got 60 MPG (24 km/l) in my Prius-2007 with a gentle city driving. And the new Prius costs just $23,000.

    Wait for a year and the new small Priuc c (Compact) being a 4-seater will offer more than 60 MPG (24 km/l).

  • Anonymous

    Oh, we can also buy a Leaf for 33,000 which we can use for all trips less than 100 miles and another car for 12,000 which we can keep just for long distance drive alone. Still we can have 13,000 in hand.

  • Octavius

    Yes I agree that $58K is absurd to the average driver, but the standard practice for new tecnologies is to sock the early adopters for startup costs, with the economies of scale kicking in after a while to reduce prices (hopefully) to a tolerable level for the average Joe/Joesephine.

    In addition, it is worth noting that diesel is significantly less expensive than gasoline in Europe, i.e., $5-$7/gallon for diesel vs. $6-$8 for gasoline depending on country. (Source: http://www.eia.doe.gov/emeu/international/prices.html#Motor) so there is a built in 10-15% discount for the diesel, plus higher mileage from a diesel engine, even without the hybrid component, so it gives at least a double-whammy.

    This sounds like a vehicle intended for specifically European consumption — let’s let them throw it against the wall, and see if its sticks, before pronouncing final judgment.

  • Abe

    Why all the “hating”. Obviously there are people out there that want it. The only issue is that they didn’t properly project demand.

    That said, you can only get half as much diesel out of a barrel of oil as you can get gasoline. So moving everyone to diesel doesn’t work and just makes our groceries cost more.

  • wxman

    The comment “you can only get half as much diesel out of a barrel of oil as you can get gasoline” is because, and only because, that’s the way most U.S. refineries are configured. There’s actually very little “naturally-occurring” gasoline in crude oil; there’s much more “naturally occurring” middle distillate (diesel fuel, jet fuel, etc.). However, catalytic crackers are optimized to produce more gasoline than diesel.

    There apparently are now technologies which are capable of producing significantly more middle distillate from crude oil. See http://www.cbi.com/images/uploads/technical_articles/HP_-_clean_fuels.pdf . Of course, the new hydro-cracking technology is expensive, but refiners are now making more on a gallon of diesel than a gallon of gasoline, so maybe that will be enough incentive to invest in the new technology.

  • Anonymous

    What about the cost of insurance and upkeep? Keeping two cars would be more expensive than one, so eventually, the cost would be greater than one diesel hybrid. Also, if you live in a city where parking can be expensive, the cost goes up higher for owning two cars.

  • Eric B

    A diesel-hybrid would be insane! City MPG of the hybrid system with the highway MPG of diesel.

  • Anonymous

    The article would be helpful if it explained why the initial cost of a diesel hybrid is so much higher than a gasoline hybrid. Diesel engines have existed for (relatively speaking) as long as gasoline and hybrids are essentially complex independent of the primary power source.

    My own understanding is that up-front costs of diesels are higher due to the need for stronger materials to withstand higher compression in combustion. The safety, efficiency, reliability and longevity of these engines, however, exceed gasoline engines. Perhaps the economics behind developing diesel hybrids ought to consider total costs of ownership including costs to fuel, maintain and replace on a “cradle to grave” or even cradle-to-cradle” basis.

  • Mark2455

    This article is bull shit, diesel hybrids can achieve 120-160 mpg if the EPA doesn’t F it up and a diesel engine has no more moving parts than a gas engine and requires less Tecnology to run. If the car manufactors won’t build them we need to start building our own.

  • tapra1

    With diesel-hybrids, the extra cost of the hybrid system and the diesel system are doubled up. The company sold out in nine days, but the total run of 3008 HYbrids offered in 11 different European countries was 300 units—the same scale as several pilot programs for fuel cell, plug-in hybrid and electric cars.Technology Review

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