Volkswagen has halted development of a new turbocharged 1.5-litre TDI four-cylinder originally scheduled for introduction in 2018 in the upcoming sixth-generation Polo.

The new aluminium block high-pressure common rail unit was planned to form part of a new small engine offensive by Volkswagen.

However, high engineering costs coupled with ever tougher CO2 and NOx emission standards, and waning demand for diesel engines in Europe’s B-segment, in the wake of the Dieselgate scandal, has led to Volkswagen abandoning its original small diesel engine strategy and switching its engineering focus to small-capacity petrol-electric hybrid drivelines instead, according to the German car maker’s head of research and development Frank Welsch.

Welsch singled out the high cost of developing an effective after treatment system for a successor to today’s turbocharged 1.6-litre four-cylinder diesel – the EA827, as it is known internally – as a key component in the decision for the switch in driveline strategy.

Welsch, who is overseeing the development of Volkswagen’s next-generation of models, is convinced that hybrids will offer an economical and viable answer to increasingly tough emission regulations. “A mild hybrid, in the end, is cheaper and has the same CO2 (as a small capacity diesel) with a lot less NOx,” he says.

Despite abandoning plans for the proposed turbocharged 1.5-litre four-cylinder diesel engine, Welsch confirmed Volkswagen is holding firm to its widely used turbocharged 2.0-litre four-cylinder diesel which will have a next generation.