I've been thinking a bit lately about conventional diesel versus hybrid spark-ignition drivetrains and what their respective strengths and weaknesses are. For purposes of this discussion, diesel will refer to a turbocharged direct-injection diesel engine like that found in the US-spec Volkswagen Golf. Hybrid, unless otherwise specified, will refer to a series-parallel system like that found in the Toyota Prius.
I will look at price premium, fuel savings, emissions, and semi-intangibles. All prices are base MSRP (before any incentives), and I'm going to look at marginal values for nearly everything. The wisdom of this is certainly up for debate, but if we're looking for something like a dollars-per-tonne of carbon value, this seems like the best approach. Finally, I won't be considering straight-up gasoline power, battery-electric power, or fuel cells, stirling engines, or nuclear flywheels. That may make for a lame deathmatch, but two contestants makes things much more manageable.
Comparing a Toyota Prius ($21,725) to a similar non-hybrid car isn't trivial, since not only does Toyota not sell a non-hybrid Prius, it also doesn't sell a vehicle that is exactly comparable in terms of size and features. Using the Camry LE ($20,375) at the high end and the Corolla LE ($15,215) at the low end, you could say the Prius represents a $4,000 premium over a comparable non-hybrid car. Honda makes things a little easier on us, where the Accord Hybrid Sedan ($30,140) costs $2,840 more than the Accord EX V-6 Sedan ($27,300), but also makes slightly more power. The Civic Hybrid Sedan costs $3590 more than the Civic EX Sedan but makes slightly less power. So we could put the price premium over a comparable conventional vehicle at roughly $3,600 to make the math easy (see below).
For a mid-priced passenger car, a turbocharged direct-injection diesel engine adds something like $1200 to the price of the vehicle. The engine will typically have lower peak output but higher peak torque that's also available at lower RPM. In other words, outside of the the occasional On-Ramp Grand Prix, the diesel will exhibit driveability that is equal to or better than the equivalent spark-ignition engine.
Advantage: Diesel. The price premium for a diesel is roughly one-third of that for a hybrid. However, as hybrid technology matures, this difference is likely to shrink, if not altogether disappear.
The Accord Hybrid's EPA gas mileage is 29/37, or 8.1/6.4 in sensible units (l/100km), whereas the standard V-6 Accord (which makes slightly *less* power) comes in at 11.8/8.1 (20/29), giving us a 100 kilometer fuel savings of 3.7 liters in the city and 1.7 liters on the highway. The Civic Hybrid is rated at 4.8/4.6 (49/51) versus the Civic EX Sedan's 7.8/5.9 (30/40), resulting in 3 liters saved in the city and 1.3 liters saved on the highway.
The Prius' fuel economy is rated at 3.9/4.6 (60/51), versus a Camry LE's 9.8/6.9 (24/34) or a Corolla LE's 7.8/6.2 (30/38). Over a hundred kilometers of driving, the Prius saves 5.9 or 3.9 liters over the Camry or Corolla (respectively) in the city, or 2.3 or 1.6 on the highway.
For diesel cars, the VW Golf again provides a good comparison. The diesel uses 6.4/5.3 (37/44) versus the 2.0's 9.8/7.6 (24/31). So the fuel savings for a 100-km trip are 3.4 liters in the city and 2.3 liters on the highway.
Advantage: Depends. The hybrids pretty well outshine the diesel in the city, but the best of the hybrids just matches the diesel's savings on the highway. This is idle stop and (to a lesser extent) regenerative braking at work, both of which could in theory be applied to a diesel, a topic I'll delve into in the conclusion. One thing to keep in mind is that diesel fuel is more energy-dense than gasoline, so the carbon footprint of the fuel—and hence the fuel savings—is more significant.
Advantage: Hybrid. I'm going to cheat on this one with a bit of just-trust-me hand-waving, and if someone can find numbers on this, feel free to call bullshit on me. I know that Emission-control technologies for diesels are much less mature than those for gasoline engines. Currently they still emit quite a lot of NOx and particulates—particularly under high load conditions—when compared with conventional spark-ignition engines. Gasoline-electric hybrids are even cleaner than conventional spark-ignition engines and therefore are the clear winner in the emissions department. As diesel emission-control technology improves, this difference is likely to shrink as well.
Toyota's fiendishly-clever Hybrid Synergy Drive gets a few points in the intangibles department. It doesn't require a conventional starter, alternator, or torque converter/transmission. All three are replaced with two synchronous permanent magnet (basically BLDC) motors and a planetary gearset. So you have a stepless transmission with none of the "Captain to Engine Room" lag you get when you mate a modestly-powerful engine to a conventional slushbox. You can fill up at any gas station, and the fuel doesn't smell funny. Plus it has a nifty on/off button.
The diesel has the advantage of an energy-dense fuel that has a readily-available and cost-competitive renewable version (B100 biodiesel). It's a proven technology that's quite fun to drive. And the hint of turbo whine when you take off sounds really cool.
Advantage: Depends. I like the hybrid because of the propellor-head geekiness of it's drivetrain, but that's probably more personal preference than anything.
If we look at the underlying technology, the reasons behind some of the above conclusions become clear. A diesel engine runs in an unthrottled lean-burn regime with the turbocharger enhancing the expansion ratio. A hybrid also runs it's gasoline engine more or less unthrottled in a lean-to-stoichiometric regime with an Atkinson cycle enhancing the expansion ratio. Because they're unthrottled, diesels can idle relatively efficiently. Hybrids typically implement an idle-stop function, achieving the same thing. So in one sense, a hybrid is a clean diesel, and a diesel is an inexpensive hybrid. The price performance of each is likely to converge as both hybrid technology and diesel emission-control technologies mature.
The obvious question is why not both? Why not a diesel hybrid? The answer, keeping the preceding in mind, is that there are diminishing returns due to overlapping advantages, along with accelerating costs. One way to mitigate the costs would be to create a mild diesel hybrid that eliminates the redundant starter and alternator. This could improve the city fuel economy and emissions, but would still cost more than the diesel alone, possibly so much so that it wouldn't be worthwhile.
An interesting side note is that the Prius-style drivetrain is being experimented with as a simple replacement for a conventional transmission, without any true hybrid capability (i.e. no traction battery). It will be interesting to see what the optimum traction battery size is for such a vehicle, and whether it is even greater than zero.
If I had to bet on a winner for the next 10 years or so, I would bet on the diesel. Nearly every car sold in North America has a diesel version that is sold overseas (including such cars as the MINI Cooper and Mazda 5 (nee MX-5 Miata)). Now that ultra-low-sulfur diesel is coming online in the States, there is nothing stopping us from slowly converting our entire fleet to diesel in fairly short order. But a significant drop in battery prices, along with the relentless downward march of electronics prices might well make hybrids, even diesel hybrids, the winner in the longer term, until and unless fuel cells or peak oil dethrone them both.
 To reiterate my previous rant, measuring fuel economy in miles per gallon is like specifying your salary in minutes per dollar: it makes for a nice round number, but it makes it needlessly difficult to compare differences. To use my favorite example, a one-mpg improvement in a 10-mpg car saves as much fuel as doubling the fuel economy of a 50-mpg car.