The global auto market is huge — some 1 billion vehicles ply the roads today. Electrics and hybrids constitute only a small fraction of the total, and it will be decades — if ever — before they become a dominant technology. In the meantime, engineers are boosting the efficiency of gasoline and diesel engines to meet increasingly strict mileage standards. In the U.S. an automaker’s fleet must average 55 mpg by 2025, up from 27 mpg today.
Analysts predict that gasoline engines will still be the predominant powertrain sold in the U.S. a decade from now, capturing 68% of the market, down from 83% in 2011. But how fast their share actually shrinks will depend on a number of factors ranging from the price of oil to the pace of improvements in the cost and efficiency of alternative powertrains like natural gas, batteries, and fuel cells. In the meantime, ladies and gentlemen, start your engines.
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This story is from the April 9, 2012 issue of Fortune.