If batteries aren’t yet up to the task of electrifying the family beater, why not shrink the beater? French automaker PSA Peugeot Citroën kicked off the Geneva Motor Show this morning announcing it was joining an accelerating embrace of this logic. The Paris-based manufacturer revealed this morning that it is pursuing a deal with Mitsubishi Motor to develop a compact Peugeot for sale in Europe next year based on Mitsubishi’s i-MiEV, the 100-mile-range commuter car Mitsubishi plans to roll out in Japan this summer.

Plenty more of these little four-wheelers are in the automotive pipeline. Daimler will sell a battery version of its popular Smart Fortwo next year, and Volkswagen is engineering a commuter EV called the Audi Up! with a top speed of 130 kilometers/hour and roughly 100 kms of range. Renault is engineering a pair of battery-powered , to be produced starting in 2011.

The bet that these automakers are making is that there will be a market for smaller electric vehicles (EVs) that will be cheaper to build and far cheaper and cleaner to operate than hybrids. With battery technology developing rapidly and the automotive market in turmoil, that logic has even gas-electric hybrid technology champion Toyota hedging its bets. At the Detroit auto show in January Toyota put the spotlight on new versions of its Prius, but also announced plans to offer a commuter EV in 2012.

To be fair, most of the companies talking up tiny EVs are similarly hedging their bets, simultaneously developing a range of hybrid options. PSA Peugeot Citroën plans to launch two diesel-hybrid vehicles in 2011 — Citroën DS5 HYbrid4 and Peugeot 3008 HYbrid4 — and is also developing a “multipurpose” plug-in hybrid EV analogous to the Chevy Volt.

Like the Volt, PSA’s plug-in will be a series hybrid, in which a small fuel-efficient engine serves only to recharge the batteries en route. Unlike the Volt, however, the engine can be swapped out and additional batteries swapped in for larger range in city driving.

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This post was created for the Technology Review Potential Energy blog