What will be the future of diesel powered cars?

I'm sure many of you have been reading the news lately on the diesel scandal by reputable German car-maker Volkswagen which supposedly had "defeat devices". This device can detect that their car is undergoing a test by the United States Environmental Protection Agency (EPA) and therefore reduces its power, performance and emissions thus leading the people who are testing it to believe that the CO2 emissions have passed the standards set.

Now the CEO has resigned and the question is, "What will be future of diesel powered cars?"

Are other car manufacturers also having a similar technology to emit 'lower' levels of CO2 and nitrogen oxides during testing and then revert back to its normal performance where the CO2 levels exceed the standards set?

Will we see the downfall of diesel cars when the public was led to believe that modern diesel engines were clean, efficient and powerful all at the same time?

Will petrol-hybrids now replace diesel technology? I'm not convinced and don't think petrol-hybrid technology up to the level yet. Maybe the best current technology for fuel economy will still be high-compression direct injection engines? Let me know your views and reactions.

Related news reports:

BBC: VW CEO resigns

Car emissions