Engineers, Sharpen Your Pencils: Ultra-Efficient Car Worth $10 Million

Offering a $10 million grand prize is one way to entice companies and gear heads of all ages to build a car with a fuel economy of 100 mpg (2.4 L/100 km), or the energy equivalent (MPGe).

That's what the X Prize Foundation is offering, with insurance company Progress Automotive putting up the money. The competition to build super fuel-efficient vehicles is open to participants from around the world.

More than 60 teams from nine countries have signed a letter of intent to participate. It will culminate in cross-country races scheduled for 2009 and 2010.

Entrants range from electric-vehicle makers such as Tesla Motors Inc. and ZAP Motors, to high school and college teams. To date, no major OEM has signed on.

The competing vehicles must be production-capable and consumer friendly.

“We're not talking about concept cars, but real vehicles,” says X Prize Chairman Peter Diamandis.

Yet vehicles displayed at an X Prize event at the New York auto show look small, lightweight and excessively streamlined. In other words, they don't look like something that will be on dealership lots any time soon.