Editor’s Note: We’d hoped to get this story up on 4 April, the day the X Prize Foundation released its draft rules for the Auto X Prize. Unwisely, we even promised to do so in a blog entry by our automotive editor John Voelcker . But even John couldn’t get a peek at the draft rules until just two days beforehand, so he chose to write a more thorough piece—at the cost of breaking his promise. We hope you’ll think it’s worth the wait.

Photo: John Shore/Automotive X Prize

Debate over energy equivalency metrics among (from left) Gale Banks of Gale Banks Engineering, Ian Wright of Wrightspeed, IEEE Spectrum 's auto editor John Voelcker, Jeff Alson of the U.S. Environmental Protection Agency, and Fujio Takimoto of Subaru.

The windowless, fluorescent-lit conference room exists for a single purpose: to provide a dedicated venue in which people from all over the world can gather to listen, learn, and debate. Even in the nicest locales, the focus is on the subject, not the surroundings.

On 9 February, two dozen world experts filed into one such room in otherwise-sunny Pasadena, Calif. Organizers of the Automotive X Prize (AXP) held the full-day session to help them craft rules for an upcoming race among ultra-high-efficiency, low-emission vehicles. Every participant was passionate and opinionated, even with the knowledge that a ringer was sitting among them: IEEE Spectrum was privileged to be the only media invited to the working group.

The impetus for the session—and the Auto X Prize itself—is the growing awareness of climate change. How to spur radically reduced energy use and carbon dioxide emissions? Offer people money! At least, that’s the theory behind the multimillion-dollar Auto X Prize, the latest privately funded incentive to encourage technology innovation (in a variety of disciplines)—all courtesy of the X Prize Foundation. The prize will go to the team that creates a production-capable vehicle that wins a long-distance stage race while achieving the equivalent of at least 100 miles per gallon (2.35 liters/100 kilometers or less) and staying within strict emissions limits.

It’s not an impossible goal. Several years ago, Volkswagen built a so-called "1-liter" car, with the goal of using no more than 1 liter of fuel per 100 km (235 mpg). It was a two-seat tandem with a single cylinder diesel engine. Unfortunately, for most auto buyers, it would be roughly as practical as a motorcycle. The discontinued Volkswagen Lupo, a ”3-liter car” (78 mpg) for the European market, sold poorly in the late ’90s, in part because it was expensive (roughly US $17 000) for its size. So the X Prize crafted its rules to encourage designs that offer the same user experience as today’s cars—engineered for volume production (no all-titanium structures or hand-built bodies)—with four times the efficiency.

But the devil is in the details. Among them: How should the relative importance of reducing CO ₂ emissions be weighed against lower overall energy consumption? How will energy usage be measured among vehicles powered by gasoline, regular or biodiesel, ethanol, methanol, natural gas…and electricity? Whose grid is used to measure the greenhouse gases (GHGs) produced by generating that electricity? Should life-cycle energy consumption play a role? And so on.

It seems a propitious time for a contest such as the Auto X Prize. For several years, Europe has taken an aggressive public policy role in reacting to climate change. But North America has long consumed the most energy per capita for personal transportation. Its auto industry remains the world’s largest, and average fuel economy is worse than the average in either Europe or Japan.

The issue of climate change is now intertwined with a desire in the United States for energy independence, and that has led to a focus on nonpetrochemical fuels. With a recent Supreme Court decision affirming that the U.S. Environmental Protection Agency can and should regulate CO ₂ emissions, automakers are bracing for another round of regulations that will affect the performance, weight, and features in the cars they offer. In the wake of the court ruling, General Motors went so far as to suspend work on a new large rear-wheel-drive ”platform” destined primarily for North American markets. And the Bush administration recently proposed that average vehicle fuel economy rise roughly 4 percent per year—potentially a very costly rate of change to achieve.