Mike Stevens | Aug 11, 2010

Volkswagen has reportedly cancelled plans to develop diesel-electric hybrid technology. While PSA Peugeot Citroen and Mercedes-Benz are working to get more of their diesel hybrid models onto the market, the cost of development has derailed the business case for Volkswagen.

Speaking with Britain's Autocar magazine, an unnamed Volkswagen source is reported to have all-but-confirmed the German giant's plans to steer away from earlier plans to develop diesel-electric hybrid models as part of its Blue-e-Motion range.

“Diesel hybrids still don’t make good business sense,” the VW Spokesperson reportedly told Autocar.

“The higher cost of clean diesel technology would make them even more expensive than petrol-electric cars. The markets where hybrids are most popular are also the ones where diesels are least popular.”

Volkswagen revealed a futuristic-styled diesel-electric hybrid in December last year, dubbed Up! Lite. Powered by a 38kW diesel-electric hybrid system that features an 800cc diesel engine and a 10kW electric motor, Volkswagen claims the Up! Lite will consume just 2.44 litres of fuel per 100km.

Both Peugeot and its partner Citroen are expected to launch Hybrid4 diesel-electric hybrids in the coming year, including a version of the Peugeot RCZ sports car and Citroen's upcoming (and as-yet unseen) DS5.

Similarly, Mercedes-Benz Australia is believed to be investigating local market potential for the E300 BlueTEC diesel-electric hybrid, first shown at the Frankfurt Motor Show in 2007.

While it may be moving away from the diesel types, Volkswagen has laid out an aggressive petrol-electric and electric-vehicle plan for the next decade.

In the next three years, an all-electric version of the Golf - likely to debut on the market with the next-generation Golf - will join the new Touareg Hybrid, along with hybrid versions of the new Jetta and Passat models, scheduled to launch in 2012 and 2013 respectively.

The upcoming E-Up, Volkswagen's first all-electric model previewed at Frankfurt last year, is slated for production in 2013.

Following the introduction of the E-Up in 2013, Volkswagen plans to launch an onslaught of electric vehicles, including the E-Golf and the E-Jetta. Future models beyond 2013 will be engineered from the outset to accommodate full electric powertrains.

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