PSA Peugeot Citroen on Tuesday unveiled a pioneering hybrid vehicle concept combining a conventional engine with compressed nitrogen propulsion which it said would halve the cost of cutting emissions compared with current petrol-electric hybrids.
The French carmaker said the so-called "Hybrid Air" system developed with auto parts supplier Robert Bosch would be lighter than a hybrid running on petrol and battery power.
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Peugeot, which is cutting more than 10,000 jobs as it struggles to stem losses and expand overseas, said the technology would be launched around 2016, with vehicles priced below 20,000 euros ($26,600).
"The cost per gram of CO2 reduction is going to be very competitive," Bosch automotive chief Bernd Bohr told reporters at a press conference outside Paris on Tuesday.
Unlike Toyota's Prius hybrid, which supplements a conventional engine with an electric motor, the new Peugeot will use a separate hydraulic motor driven by nitrogen compressed by energy from braking and deceleration.
In city driving conditions, the vehicles can travel on the compressed gas power as much as 80 percent of the time with the three-cylinder petrol engine cut, Peugeot said.
Peugeot said a prototype Hybrid Air subcompact emitted 72 grams of CO2 per km, compared with 104 grams for a Peugeot 208 model with the same combustion engine.
Peugeot aims to price subcompact vehicles with the new technology below 20,000 euros, development chief Guillaume Faury said. The similarly sized Toyota Yaris hybrid has a starting price of around 18,500 euros in France, excluding any environment-related discounts.
Faury declined to give detailed cost estimates but said the new transmission would cut the cost per gram of CO2 saved by half when compared with equivalent petrol-electric hybrids.
He said the new power unit weighed 100 kg, about half that of other typical hybrids.
Unspecified technical challenges have yet to be overcome before a commercial launch, Bosch's Bohr said.
"Some more work will have to be done before these cars find the mass market," he said.
European hybrid sales rose about 50 percent last year, according to Peugeot data, even as the region's overall auto market shrank to a 17-year low.
Peugeot's existing diesel-electric hybrids claimed a 16 percent share of that market, with leader Toyota claiming 70 percent. ($1 = 0.7510 euros)