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The authors put conditions on diesel efficiency pp. 276 with "when comparing with modern diesel vehicles with high pressure direct injection and turbo charging, HEVs lose out when it comes to constant driving over longer distances." This well qualified and limited diesel performance, by no means the standard for all diesels, presumes cities and urban driving do not exist.
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I think it's reasonable to call it standard. The tough regulations imposed by the CARB and the U.S. EPA have effectively banned all diesels except for the direct-injection, turbo-charged kind. The non-DI, non-turbo cars simply do not exist in North American 2008 models.
Also, if one is going to compare the "bleeding-edge" hybrid technology, than would should use "bleeding-edge" technology available for diesel, gasoline, and so on. That's consistent.
And finally:
They really make no mention whatsoever of urban driving? That's quite surprising. Most hybrids have the advantage there because of their EV modes. (Of course it's worth pointing out that diesels can also be hybridized, thus achieving the same EV-like performance in city driving.)
The U.S. EPA performed a study using the GREET(?) model, and they reached most of the same conclusions as your $40 study. They found that gasoline hybrids are very efficient, but that diesel hybrids were the best overall (both urban and suburban).
So that provides at least some backing for the conclusion.