I think the Progressive Automotive X Prize is a great idea. It may work where the government has failed.
Existing government programs to do similar things–particularly the calamitously impractical Partnership for a New Generation of Vehicles–have failed to produce real breakthroughs. Toyota and Honda beat American-based companies to the market with practical, highly fuel efficient hybrids largely because they focused on what consumers wanted (practical, fuel efficient cars) rather than trying to adhere to goofy government mandates. By setting the bar very high, 100 miles per gallon, furthermore, the X Prize sponsors are pretty much forcing the use of some sort of breakthrough technology.
When and if a 100 MPG car comes to market, however, it’s likely to involve some sort of trade-off for consumers. The last car with a fundamentally new drive-train system–the first generation Toyota Prius–was a tiny, expensive, probably-not-too-safe car that, in its base configuration, lacked such expected features as automatic windows and a CD player. It sold well enough, however, to convince Toyota to build a truly viable, big-enough-for-a-family second generation version of the car with every expected amenity. Any first generation product is going to have to have lots of trade-offs. If we ever have a 100 MPG car, one can bet that it will, indeed, look at lot like the first generation Prius. In time, I think, people can figure out which trade-offs they want to make for fuel economy. And, of course, there’s almost no way getting around the fact that the first 100 MPG car is going to be smaller and less safe than a standard-issue SUV. There’s nothing wrong with this. In fact, it’s the way progress happens.