Based on a Peugeot 208, it will combine a normal engine with a radical new system that runs on compressed air.
The firm says the car could reduce petrol bills by 80% when driven in cities.
The system works by using a normal internal combustion engine, special hydraulics and an adapted gearbox along with compressed air cylinders that store and release energy. This enables it to run on petrol or air, or a combination of the two.
Air power would be used solely for city use, automatically activated below 43mph and available for ‘60 to 80 per cent of the time in city driving’. By 2020, the cars could be achieving an average of 117 miles a gallon, the company predicts.
The air compression system can re-use all the energy normally lost when slowing down and braking. The motor and a pump are in the engine bay, fed by a compressed air tank underneath the car, running parallel to the exhaust.
The revolutionary new ‘Hybrid Air’ engine system – the first to combine petrol with compressed air – is a breakthrough for hybrid cars because expensive batteries will no longer be needed.