The French company showed its four-wheel drive diesel hybrid powertrain on the Peugeot Prologue and Citroen Hypnos (pictured) concept cars at this year’s Paris motor show.
It’s working with German electronics firm Bosch to develop electric motors and power electronics for production cars.
PSA says diesel hybrid technology is a key focus of its environmental strategy, but developing it and making it production-ready is a major challenge.
Bosch will supply the rear electric motor, the front-mounted high voltage alternator and the power electronics that will control them.
It will also develop and supply the interface between the electric and electronic components, the ABS anti-lock braking and electronic stability programmes.
Working with Bosh will bring diesel hybrids to market more quickly and cheaply, PSA Peugeot Citroen says.