PARIS (Bloomberg) -- PSA/Peugeot-Citroen SA will unveil the world's first diesel-electric car this week to take on Renault SA's all-electric strategy as both French carmakers play catch-up to Toyota Motor Corp.
PSA, Europe's second-largest automaker, will use the Paris auto show to push a hybrid version of its 3008 crossover hatchback, while Renault sets out its strategy for making battery-powered cars a mass-market success.
PSA CEO Philippe Varin and Renault-Nissan CEO Carlos Ghosn's face-off exemplifies industry divisions over the kinds of green technology consumers might embrace. Carmakers are chasing market leader Toyota, whose 1997 gasoline-electric Prius was the world's first hybrid.
European prices for the 3008 hybrid will start somewhere above 30,000 euros ($40,400), Peugeot spokesman Jean-Marc Sarret said, compared with 21,600 euros for the basic gasoline version.
PSA plans to offer the technology, which it calls “Hybrid4,” with three other large car models.
“We're convinced customers will be prepared to pay more for diesel hybrids because the price-gap is justified by their functionality and fuel efficiency,” Vincent Besson, Peugeot's product director, said in an e-mail. “Hybrids have a big future because they're much more versatile than electric cars.”
The 3008's design combines a diesel engine powering the front wheels with an electric rear transmission, offering a range of just 3 kilometers (1.9 miles) in electric- only mode and an average 99 grams of CO2 emissions per kilometer, compared with 89 grams for Toyota's Prius. PSA has said rechargeable “plug-in” versions with bigger batteries and motors will follow in 2014.
Toyota Europe Vice President Michel Gardel said in an interview that hybridizing diesel creates additional costs that are unacceptable to many consumers, in return for relatively small efficiency gains.
Toyota will show the prototype of a hybrid city-car planned for 2012 in Paris. The hybrid version of Toyota's Auris compact, introduced to Europe in July, has already sold out its planned 2010 production of 14,000 cars, Gardel said.
Toyota delivered more than half a million hybrids last year worldwide and plans to add a plug-in Prius in 2012.
In France, where hybrids qualify for a 2,000 euro government incentive and electric-car buyers get 5,000 euros, the Auris hybrid comes out 1,300 euros cheaper than the 22,600-euro price tag on its diesel sibling
Renault and Japanese affiliate Nissan Motor Co. are wagering $4 billion that their battery vehicles will find a mass market amounting to 10 percent of global sales by 2020. Peugeot, which sees half that demand for electric cars, is counting on increasing oil prices and environmental regulations to make the case for diesel hybrids, which are more costly and potentially more efficient than their gas-electric equivalents.
“Renault-Nissan has missed the boat on hybrid technology,” said Naimish Shah, who helps manage $100 billion for New Jersey-based Lord Abbett. “Electric cars are a risky bet as hybrids improve and prices come down.”
GM, Honda competition
The field of carmakers offering technology with lower emissions is getting increasingly crowded.
Toyota and Honda Motor Co. are extending their gasoline-electric transmissions from the original mid-sized sedans to smaller models, unlocking bigger markets and economies of scale for their components.
Honda will unveil the Jazz subcompact hybrid, to be introduced in Europe early in 2011, in Paris.
On the all-electric car front, General Motors Co.'s $41,000 Chevrolet Volt comes to market next month. The Volt will be sold as the Opel Ampera in Europe starting next year. Nissan's Leaf electric car goes on sale in December.