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Prizes have long been used to stimulate innovation. In 1919 the Orteig Prize offered $25,000 to the first pilot to fly the Atlantic nonstop. Charles Lindbergh won it in 1927, fostering the aviation industry. In 1996 the X PRIZE Foundation offered $10 million to the first private team to fly into space. Burt Rutan and Paul Allen beat 25 teams from seven nations in 2004 to win by designing and launching the SpaceShipOne.

This spring the Automotive X PRIZE will offer $25 million to anyone who can design and build a superefficient, commercially viable car that gets 100 miles per gallon. "Our intention," says Mark Goodstein, executive director of the contest, "is to wave a big red flag around this problem. The two main guideposts for us are breaking our addiction to oil and numbing the effects of climate change." According to the National Highway Traffic Safety Administration, the average fuel economy for the current fleet of autos available to American consumers is no better than Ford's (F) original Model T—around 25 mpg.

Shaping a competition to promote the privatization of space travel may prove easier than creating a contest for an innovative car. Determining equivalencies between possible future fuels, which would allow judges to compare the performance of a traditionally powered vehicle with another using a fuel cell, electricity, or other advanced technology, is complex. And it remains to be seen if major carmakers will buy into the challenge or ignore it. Neither Boeing (BA) nor Lockheed Martin (LMT) participated in the original X PRIZE, though they worked on similar projects for NASA.

The hope is that the Automotive X PRIZE will goad the automakers into action. The best-selling Prius has already turned Toyota (TM) into one of the most powerful green brands in the world. In January, General Motors (GM) took the wraps off its Chevrolet Volt concept car, which gets up to 150 mpg by combining electric-drive components with a small backup engine. However, GM says it needs big improvements in battery technology to bring the Volt to production. There are rumors Toyota might get close to the 100 mpg benchmark with the upcoming 2009 redesign of the Prius. Mercedes-Benz (DCX) has toyed with ultraefficient aerodynamic prototypes that achieve fuel economy of more than 70 mpg, thanks to their shape.

The prize could also fire the imaginations of grease monkeys and homegrown enthusiasts. Some hybrid owners have tinkered with their vehicles, adding components that double mileage to 100 mpg. Small startups are working on vehicles that could win, too. In January, Accelerated Composites in Carlsbad, Calif., announced a two-seat vehicle, the Aptera, that will cost around $20,000 and get an astonishing 330 mpg.

That is, perhaps, the best sign of the strength of the X PRIZEs: the proliferation of technologies and projects already working toward the award's main objectives. On the Web site (auto.xprize.org), the contest is announced this way: "People love their cars. They are vital links to our jobs, our community, ourselves. For everything we love about them, cars are chained to the most severe global crises of our time: oil dependence and climate change." With 40% of world oil output fueling the automotive industry (transportation soaks up 65% of all U.S. oil consumption), the world needs a car that gets 100 mpg.

By Matt Vella


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