Not so long ago, most of the world’s carmakers were trumpeting plans to do away with traditional petrol engines altogether. Revolutionary fuel cell powered cars running on hydrogen and emitting no carbon dioxide were supposed to go into mass production by about 2005.

That year has come and gone. But the sector has still made some progress. High oil prices have renewed interest in more economical diesel engines and flex-cars that can run on ethanol. Especially in the US, the biggest buzz has been over hybrid electric vehicles, which capture and store braking energy.

Toyota, the leader in the area, has already sold over 600,000 hybrids and looks well on track to sell one million a year, or about 10 per cent of its total global volume, by 2010. Honda is starting from a lower base, but growing fast. Others are scrambling to catch up. An alliance of General Motors, BMW and DaimlerChrysler recently unveiled plans to spend $1bn on developing a new hybrid transmission system and integrating it with other vehicle components.

Such ambitions are not without risk. Hard-pressed Ford hedged its bets by licensing much of the necessary technology from Toyota – and recently dropped its goal of selling 250,000 hybrids by 2010, preferring instead to invest in more incremental efficiency improvements.

But the dangers of being left behind in hybrids may be even larger. Political pressures are increasing, while Toyota is rapidly reaching the point where its famed capacity for reaping scale efficiencies kicks in. Toyota’s rivals can still fight back. After all, the petrol engine was only one of many competing approaches to powering cars a century ago. But they will have to move fast, particularly as hybrids look like a stepping-stone on the path towards fuel cell powered cars – still a likely ultimate destination.

Copyright The Financial Times Limited 2018. All rights reserved.

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