By Theo Leggett
Business reporter, BBC World Service
Diesel powered racing cars are set to dominate Le Mans
Audi and Peugeot will do battle for victory in the prestigious but gruelling Le Mans 24 Hours motor race this weekend.
It is expected to be a tense, nail-biting contest between two of Europe's top motor companies.
And remarkably, they will both enter the race with cars powered by diesel engines.
It is part of a process that has already transformed the public image of the humble diesel engine, almost beyond recognition.
Once derided as noisy, smelly and slow, diesels were considered suitable only for lorries, delivery vans and taxis.
They gave good fuel mileage, but they were not in any way appealing to ordinary motorists.
Yet nowadays diesel engines power some of the most best-selling cars on the market.
Audi has even created a diesel version of its 186mph R8 supercar.
The rise of the diesel has been prompted by the increasing price of crude oil and mounting environmental concerns, both of which have placed a premium on fuel efficiency.
But that has created yet more problems.
There are so many diesel engines out there, that supplies of the fuel itself are becoming scarcer, and prices are rising fast.
So the next step may be even more ambitious: the development of a diesel-electric hybrid, combining an electric motor with a high-tech diesel engine.
Petrol-electric hybrids are very much in vogue at the moment.
They use less fuel than conventional petrol-powered cars, and are popular with the eco-conscious motorist.
The market leader is the iconic Toyota Prius.
More than a million models have now been sold.
But beneath the hype lies an uncomfortable truth.
Consumer tests have shown that the current generation of petrol electric hybrids are little more efficient than a top of the range diesel.
So another step is needed.
The logical conclusion is to get the best of both worlds, by building a diesel electric hybrid.
"Diesel hybrids are basically a good idea", says Paul Nieuwenhuis, an automotive industry expert at Cardiff University.
"They give you an extra 15-20% fuel saving over a normal hybrid."
One manufacturer intending to take advantage is PSA Peugeot Citroen.
The French car manufacturer is planning to have its first diesel hybrid passenger car hit the road by 2010.
"We need to decrease the fuel consumption of the car and reduce its environmental footprint", says the company's spokesman Marc Boque.
"Diesel hybrids bring a real breakthrough in terms of consumption and CO2 emissions. We are quite sure that hybrid technology, and particularly diesel hybrid technology has a big future."
Other manufacturers, including the US giant General Motors and Volkswagen, have also developed diesel-electric prototypes, and could have cars in production within a few years.
But not everyone believes that diesel hybrids are the future.
Peugeot wants to bring racing technology to the road
Among the sceptics is the current market leader in hybrid technology, Toyota.
The company has repeatedly said it has no plans make diesel-hybrid passenger cars - although it does use the technology for some commercial vehicles.
The reason for its reluctance is cost.
Diesels generally cost more to make than petrol cars, while hybrid technology is also expensive.
Toyota thinks combining the two would add thousands of pounds to the cost of a new car, pricing too many consumers out of the market and making diesel hybrids difficult to sell.
"Already the diesel [price] premium is quite high, then you'd have to pay a hybrid premium, so we're not seeing that there's a market," Toyota Motor Europe chief executive Tadashi Arashima told BBC News in 2006.
"Of course it is an expensive technology, so we will begin with top of the range cars in each segment of the market," says Mr Boque.
"But we will very quickly develop the technology for the mass market as well."
In the meantime, like other manufacturers, Peugeot is also developing so-called "micro-hybridisation".
This involves using electric systems to stop and start the engine of a car when it is stuck in traffic, minimising fuel wastage.
Some experts believe that as these fuel saving systems become more sophisticated, full-scale hybridisation could even become unnecessary.
Peugeot, though, thinks diesel hybrids in particular have a valuable future and is planning to make a very public gesture to prove it.
This year, it wants to win at Le Mans with a diesel car.
By 2009, it is expected to go one step further and enter the race with a diesel hybrid.