Compressed air propulsion is not new science! In 1879, the first mechanically powered submarine, the French Navy's Plongeur was powered by compressed air! Torpedoes were first powered by compressed air. Can a purely compressed air car work? Not very well and not very long, but such a system mated with an I/C engine sounds much better (and cheaper) than an electric hybrid.
A Lund University (Sweden) professor estimates that a compressed air hybrid system could save 60% of fuel consumption of city buses. There is logic in his comment. With stop and go driving, a bus uses energy when both accelerating and decelerating. If some of that energy used to decelerate could be captured to use in accelerating, the net result would be improved fuel efficiency, lower fuel costs and less pollution (and no, I do not believe that CO2 is pollution).
As I consider myself an average consumer, if Peugeot can produce a car that is of good quality and can reduce my costs, I would be interested in it. I will not write it off merely because I don't think they can do it. What I do know is, many cities suffer from pollution, especially vehicle exhaust emissions.
Below, is a picture of Calgary when there is a temperature inversion. Since there is no heavy industry, this ugly brown cloud is mostly caused by vehicle emissions. (Again, CO2 is not a pollutant, but there is lots of 'crap' in exhaust emissions.) I can only imagine what LA is like!