Expanding a bit on Erin's post on Europe's diesel-centric approach to saving fuel, I guess my first thought is "why not do a diesel hybrid"? It seems like European car companies would be in a unique position to offer such a powertrain. But moving beyond that, it appears that the Europeans are looking into two alternative fuels that are no strangers to the US - natural gas (NG) and propane. Fleets and off-highway vehicles here in North America have been using these fuels for years. I think there's still a fair debate as to whether such fuels are economically viable on their own or if it's due to a tax advantage, but there's little doubt as to the potential environmental benefits. Propane-fueled lift trucks are run indoors with minimal emission controls, and Honda's Civic GX is the cleanest vehicle available in the US. NG supplies are tight at this time (and there's some debate as to the size of total reserves, at least here in the US), and the supply of propane is relatively inflexible due to the fact that it's essentially a byproduct of NG production. But design an NG- or propane-fueled vehicle correctly, and it'd be able to burn whatever gaseous fuels may be available in the future (anything from gasified wood or coal to hydrogen, I would think). That sort of flexibility might be very attractive to buyers in coming years.
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