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What the future of the auto industry will look like

Surging demand for cars in rapidly growing nations will mean a robust car industry in 20 years. The US will have a piece of it – though smaller than today – and the models it turns out will be much greener as the iconic industry reinvents itself.

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Regular hybrids, like today’s Toyota Prius, use an electric motor and a small internal combustion engine. Plug-in hybrids use that technology, too, but with a big battery and big electric motor, plus – surprise! – a plug. They also recharge their batteries by plugging into the regular electric grid.

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Waters says the IDEA will get around 100 miles of city driving for every gallon of gas. It’s van-size because the company figures it could win over bean counters at companies pressed by high fuel costs, such as FedEx, UPS, and the US Postal Service.

But if the company is to turn out 50,000 of these swoopy things a year by 2012, as it plans, it needs cash – and today investment dollars are hard to come by. So Bright has turned to the federal government. The firm has applied for $35 million in grants from the stimulus bill, as well as a $450 million loan from a Department of Energy green technology program.

Bright is hardly the only US firm with an idea like IDEA. At least a half-dozen start-up companies, with names like Aptera and Visionary Vehicles, are vying for funding to build the next-generation automobile.

Many – probably most – won’t survive. That shouldn’t be surprising, as firms rose and fell in the early years of the internal combustion engine, too. Who today remembers the Mercer Raceabout, or Essex, or Nash Statesman? All were cutting-edge cars in their heyday. But their heydays all turned out to be brief.

Of course, nothing is certain about the auto industry these days. It is shaking to its very foundations. Toyota is losing money. A niche Swedish sports-car maker has bought country icon Saab. Hummer has become less fashionable than Hyundai. Chrysler’s next model may be based on the Fiat 500, a car so small that it looks like a Dodge Charger’s lunch.

Then there is General Motors, ward of the state. Those who remember GM as the producer of such iconographic autos as the 1957 Bel Air may see its fall as a shame. Those who bought the awful 1970s Chevy Monza (or its evil twin, the Oldsmobile Starfire) may consider its bankruptcy well deserved.

The US government has already invested some $80 billion in tax dollars in GM and Chrysler. It probably will be at least a year before the Treasury can even begin to plan when it might sell government-owned shares in the company to recoup that cash.

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