PSA Pursues 2-Pronged Strategy for Diesel Hybrids

It was something of a surprise when Jean-Martin Folz, then CEO of PSA Peugeot Citroen, introduced two diesel hybrid prototypes to the press in January 2006 because Folz and most of the European industry at the time were groaning about hybrids due to cost.

But Folz argued if people were willing to pay more for a diesel because it was 20% more fuel efficient than a gasoline engine, people would pay more for a hybridized diesel because it would save another 30% on fuel. The Peugeot 307 and Citroen C4 Hdi hybrids hit 69 mpg (3.4 L/100 km), the equivalent of 90 g/km of carbon dioxide emissions.

“The objective is to end up with a price gap between the hybrid diesel and the diesel that is equivalent to the gap between gasoline and diesel,” said Folz at the time. “For that, we have to reduce the cost of the hybrid diesel by (a factor of) three.”

His reasoning has touched other auto makers. For example, Chrysler LLC showed a diesel hybrid concept at the North American International Auto Show in Detroit in January, and Ssangyong Motor Co. Ltd. displayed one at the Geneva Motor Show.

Meanwhile, PSA quietly has ended a $156 million (E101 million) project to reduce the costs of hybridization. “We designed that program in the hope of having hybridized diesel engines for many, many people, not only for the elite,” says Pascal Henault, director of research and innovation at PSA.

But last November, the auto maker decided to switch gears. It now is focusing on a 2-tiered approach to hybrid diesels: stop-start micro-hybrids for the masses and full hybrid-electric diesels for luxury cars.

To meet its goals for reducing CO2 emissions, PSA will count on massive use of micro-hybrids, second-generation systems that turn off gasoline and diesel engines when the car is stopped. The auto maker plans to make stop-start systems standard on 1.1 million cars in 2011 and 1.6 million in 2012, the year Europe orders the auto industry to emit an average of 120 g/km of CO2 in new cars.

Nevertheless, PSA will continue to develop full diesel-hybrid systems for expensive cars where the business case makes sense, says Henault.

“We will go with state-of-the-art technology; we will sell it at the price of that technology; and we will put this on cars on which the owner will agree to pay the cost of the technology,” he says.

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Peugeot 307 Hybrid-Powertrain System