Inventors to race for millions in auto-efficiency prize

Story Highlights

• X Prize founder Peter Diamandis establishing contest for fuel-efficient cars
• Competition will be launched later this year
• Prize will be in multimillion dollar range, foundation says

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(CNN) -- The man behind the aerospace Ansari X Prize, which helped propel the first ventures into the field of space tourism, is taking on fuel efficiency in cars.

Peter Diamandis, the founder and chief executive officer of the X Prize Foundation, is issuing a worldwide challenge for teams to come up with an efficient car model that can be mass produced. The prize will be officially launched later this year, and teams will have about a year and a half to build their vehicles before the first qualifying race in 2009.

"The Ford model T got 25 miles per gallon, and the cars today are getting 18 miles per gallon, and that's just wrong," Diamandis told CNN recently.

"Prizes are about encouraging the kind of behavior and ... breakthroughs that will change people's lives," Diamandis said. He added," Our belief here at the X Prize, is if we're able to set a clear set of rules and a large enough cash prize, we can literally reach across space and time, and solve any problem that exists."

That way of thinking has certainly worked for Diamandis, who after tackling space tourism, has looked to spur innovation in genetics, as well as fuel efficiency, through his X prizes. Diamandis established the prize in 1995. It is modeled after the Orteig Prize -- the $25,000 prize that helped inspire Charles Lindbergh fly across the Atlantic Ocean in 1927.

"When I originally came up with the idea for the X Prize, I was reading the spirit of St. Louis, the book written by Lindbergh in the mid-'50s," Diamandis said.

Thinking of his lifelong passion, space flight, Diamandis added, "I said, 'I need to come up with this prize.'"

Nine years later, the foundation awarded the $10 million Ansari X Prize to Mojave Aerospace Ventures for the flight of SpaceShipOne. Mojave Aerospace Ventures had built and launched a spacecraft capable of carrying three people to 100 kilometers above the earth's surface within two weeks.

For the automotive X prize, Diamandis says the foundation is looking for cars that can qualify in two categories: a traditional four-seat, four-wheel category, and a nontraditional category of at least two seats and at least three wheels. Other guidelines for the competition are being worked out, he said, although both cars will be required to exceed 100 miles per gallon, Diamandis said. "They may be powered by electricity, natural gas, by methane, by hydrogen. We don't know."

Diamandis has not yet announced the prize amount for competition, although the X Prize Foundation's Web site promises the cash takeaway will be in the multimillion dollar range.

Diamandis is optimistic about the results of the competition will be -- both the prize winner, and the affect on society.

"We want to change the paradigm of what people think they should and can drive today," he said.