Siemens signed an agreement with a Vietnamese automaker to manufacture diesel-electric hybrid buses this week.
The German company said it will supply parts and provide technical assistance to the Hanoi-based Vinamotor as it assembles the buses.
A prototype of the hybrid system, known as Elfa, will be built this year, Siemens said in a statement. It didn't mention when they would begin commercial production.
The company said the new technology harnesses the energy that is released through braking. Elfa stores this energy and reuses it when the vehicle accelerates.
Elfa buses can also be driven purely by electric power, allowing transport operators to profit from significant fuel savings while dramatically reducing emissions.
According to Siemens, Vietnam's public transport system is facing challenges that coincide with growing transportation needs among its urban residents.
The Ho Chi Minh City bus system, for instance, reportedly meets just 10 percent of its transportation needs. The city plans to put 1,680 new buses into use this year, including 300 that run on biofuel.
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