Carmakers have become innovative once more, driven by environmental regulation and high fuel prices, but will it last? Richard Lofthouse reports

The motorcar industry lurched into this decade weighted down by an increasingly clunky business model. National champions on both sides of the Atlantic fixated on volume growth, cosmetic tweaks and stale marketing campaigns that still largely revolved around engine size and power. The only thing that appeared to have changed since the 1950s was the rhetoric. While the PR-primed industry leaders were eager to talk lawmakers and lobbyists through their environmental initiatives, they could have driven a truck through the disparity between what was said and what was actually done. For example, BMW talked a good talk about the hydrogen future throughout the 1990s but as recently as last March unveiled its fourth generation M3, which is more powerful but less fuel efficient than any of its predecessors.

Six months later, and the days of gas-guzzling appeared to be numbered for real. But the sudden race to replace the internal combustion engine had nothing to do with treehuggers wailing about greenwashing stunts; last September all the noise was about the looming sub-prime crisis in the US, oil hurtling towards $100 a barrel and EU-threatened penalties for polluting cars. Several big exhibitors at the unfortunately timed Frankfurt Car Show rushed to align themselves with planet iPod, where smaller is cuter and everything runs off lithium-ion batteries. Cut to this March’s Geneva car show and BMW announced that its EfficientDynamics technologies would be deployed across its whole range and that a hybrid diesel might power future SUVs. But, most startlingly, the company announced a week later that it is working on an all-electric city car that could be on sale as early as 2012. Not only was this an extraordinary U-turn from the self-proclaimed maker of the ‘ultimate driving machine’, it also kicked into touch the ‘distant future’, liquid hydrogen fuel solution that the company had stubbornly backed for years.

The Germans were not the only ones dancing on a hubcap. Last year General Motors, which manufactures the oil rig-sized Hummer off-roader, unveiled an electric car called the Volt that it claims will be on sale within two years, which possibly forced BMW onto the same bandwagon. And DaimlerChrysler, which already shares a hybrid-drivetrain programme with BMW, recently displayed a fully working, electric Smart car. One of the compelling reasons for moving in this direction is that costs per kilometre for electrically powered vehicles are a fraction of petrol cars, prompting some analysts to wonder if utilities will be the Shells and BPs of tomorrow, fuelling the world’s transport fleet.

Unlike other electric cars to date, the GM Volt looks credible. Although still employing a petrol engine in a hybrid configuration, the car is completely driven by battery up to a distance of 60km, after which the petrol engine springs to life – not to drive the wheels directly, as in Toyota’s Prius hybrid, but to regenerate the battery.

Other near-to-market concepts under development include Mitsubishi’s i-EV, a diminutive city car driven by a 47kW electric motor, currently on test in Japan; Nissan’s Pivo 2, another electric car; Honda’s fuel cell FCX Clarity and Toyota’s electric-ethanol hybrid, the Concept 1/X, plus Fiat’s two-cylinder, part-methanefuelled Panda Aria. Starting in 2009, Audi, BMW and Mercedes will all start to offer petrol-electric hybrids of their larger vehicles.

Numerous less visionary but real-world eco-tweaks are suddenly hitting the showrooms everywhere. The real-world champion remains the Smart Fortwo diesel, with a CO₂ reading of just 88g per km driven and fuel economy of 3.3 litres per 100km (85.6mpg). And thereafter is a wide and varied cast of showroom heroes already for sale, typically branded as a new product line within an existing range, thus satisfying the industry’s insatiable desire to show how innovative it is. BMW’s EfficientDynamics has its counterpart in the form of Seat’s Ecomotive label, VW’s BlueMotion, Daimler’s BLUETEC, Ford’s ECOnetic, and GM’s EcoFLEX.

Most of these concepts involve energy-saving technologies that were tried before in the 1970s but then thrown aside as oil became plentiful and cheap, such as stop-start technology that shuts the engines down when the brake is applied, restarting it again when the brake is released. Another, fuel-saving tactic is to fit tyres with more rolling resistance and less drag, while others include better fuel-injection systems, brake energy regeneration and weight reduction.