Peugeot has taken the hybrid to the next step with a world-first diesel-electric combination, says Andy Russell.

Hybrids are nothing new. It's more than 10 years since Toyota set the ball rolling with the original Prius and, since then, Lexus and Honda have got on the green bandwagon.

So how come Peugeot is claiming a world-first with its 3008 Hybrid4? The French car-maker is the first to launch a diesel-electric hybrid. And next it is going to be rolled out to the 508 saloon and estate and sister company Citroen's DS5.

And this new hybrid system has a lot of potential and certainly works well in the Peugeot.

The tried-and-tested 163bhp 2.0-litre turbo diesel drives the front wheels with a 37bhp electric motor for the rear wheels. It gives a combined 200bhp – no mean output – yet can run on electric or diesel alone or a combination of both for serious performance or four-wheel drive capability.

It really is the best of both worlds because on long journeys you get the added benefits of diesel economy and in the city you can drive a couple of miles in 'zero emission mode (ZEV)' – electric motor only – with the drive batteries, stored under the boot floor, recharging when the engine is running, slowing down or when braking with the electric motor doubling as a generator and taking otherwise wasted kinetic energy to put charge back into the batteries.

It all works so seamlessly, helped by a electronically-controlled six-speed manual gearbox which can be used in automatic mode or manually via shift paddles behind the steering wheel, that at low speeds you often aren't really aware the diesel engine has cut in.

The 3008 Hybrid4 offers four drive modes – ZEV, sport for quicker gear changes at higher revs and coupling the electric and diesel power for dynamic performance, 4WD for all-wheel drive and 'auto' which just lets the whole system go about its business.

I left it in 'auto' until in traffic when I switched to ZEV mode to make use of battery power which, with a light foot, will take you to about 35mph before the diesel cuts in. As with conventional fuel, the faster you go in electric mode the more 'juice' it takes from the batteries. In stop-start driving, strong engine braking helps get charge back into the battery pack.

Overall I got 60mpg, short of Peugeot's figures, but in city traffic I regularly saw 80mpg when the electric motor came to the fore.

Given that the 3008 HYbrid4 is a mean, green eco car, it's no slouch – put your foot down hard and it is surprisingly brisk.

Nor is the 3008 dull to drive. The suspension is quite firm but, apart from feeling sensitive to poor roads at low speed, is generally supple enough to give a comfortable ride. And it handles well for a big, tall car with a good stance through corners and well-weighted steering.

The 3008 is Peugeot's contender in the increasingly-popular crossover sector – combining the more macho styling and high-rise driving position of a sport utility vehicle with the practicality of a spacious hatchback or estate car.

The 3008 is one of the most practical and versatile offerings.

With a flat floor in the back it will seats five adults quite comfortably with lots of headroom and acceptable legroom provided front passengers don't put their seats right back.

The HYbrid4's doesn't have the split-level boot of conventional petrol and diesel 3008s because the battery pack is under the floor but there's still a usefully-deep underfloor compartment and up to 420 litres of cargo space with the rear seats in use. The boot floor is quite high but a split tailgate, with the top half lifting and the bottom section dropping down to form a shelf, makes loading and unloading easier. Rear seats backs split 60/40 and fold totally flat.

The interior is modern and tastefully trimmed, the driving position has plenty of adjustment to find the ideal set-up and the high centre console between the front seats and array of controls and buttons, some small and fiddly, give the feeling of sitting in a cockpit. The rev counter is replaced by a dial showing power use and recharging.

The entry 99g model includes stability control, Bluetooth, LED running lights, dual-zone climate control, electric parking brake, electric windows, rear parking aid, cruise control with speed limiter and electric folding mirrors.

The 99g SR and 104g models add satellite navigation with 7in multi-function screen and head-up display which reflects essential driver information on to the windscreen. The 104g model also gets bigger 17in alloy wheels and a door sill lighting pack.

Combining a diesel engine with an electric motor makes a lot of sense especially for higher-mileage drivers who need a green car for urban driving and a capable, economical long-distance cruiser.