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Excellent post. I recently wondered what Toyota is up to with the next generation of Prius and it seems that they are targeting the engine and drive train efficiency issues. They recently had a press conference where they made the claim that their new small engines will reach 37-38% engine efficiencies (source: https://www.youtube.com/watch?v=OCtyDzv_UMo ). They also recently announced work at making electric modulation more efficient by going with SiC (http://newsroom.toyota.co.jp/en/detail/2656842). They seem like big leaps forward though still within sustaining innovation. What really surprised me was this: http://www.greencarreports.com/news/1091794_toyota-describes-combustion-engine-that-generates-electricity-directly

If they can get a linear engine to work they can efficiently convert the chemical energy in gasoline into electricity for use within a short period of time (acceleration), limiting the need for large costly batteries. It should also be a much simpler engine than what we are used to and I guess it more or less scales with car size. If you need more power add 2 or 4 cylinders. This suggests much lower initial and lifetime costs. Of course we still need gasoline but if demands are much lower it might make sense for society to switch to more expensive "renewable fuels" from algae or some such. No need to put in new infrastructure either. Of course they might never get it to work or the issues in battery chemistry might get solved first.

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