Okay, so it keeps some college kids off the streets.

The state that conducts more automotive research and development work than the other 49 combined — Michigan — will host the qualifying and final competitive events for the Automotive X Prize, a quest for 100 mpg vehicles that might actually be saleable.

While the contest is in Michigan, the winners will be announced in Washington, DC, the source for some of the funding.

The goal of the Progressive Insurance Automotive X Prize is to “inspire a new generation of viable, safe and super fuel-efficient vehicles.”

Prizes totaling $10 million will be awarded to vehicles for clean, production capable and “super” fuel-efficient vehicles that exceed 100 MPG in “equivalent” fuel economy.

Half of the $10 million purse will be awarded to the Mainstream Class winner, defined as vehicles that meet current consumer expectations for size and capability.

The remaining $5 million will be split between two winners in the Alternative Class — one vehicle with side-by-side seating, and one vehicle with tandem seating. This is said to be for “innovative ideas that push forward today’s concept of what a car is.”

“As the birthplace of the American automotive industry, Michigan has the knowledge base, the talent, and the facilities to support the innovation central to achieving the goals of the Progressive Insurance Automotive X Prize and the future of the automotive industry,” said Peter Diamandis, chairman and CEO of The X Prize Foundation.

Through a $3.5 million dollar gift from the U.S. Department of Energy, the Progressive Insurance Automotive X Prize as developed a “national education program” for students and the public about advanced vehicle technologies, energy efficiency, climate change and alternative fuels.

Some of the critical elements of the competition will be conducted in secret sessions, with only select events open to the public and media. Whether this constitutes a “smoke filled room” of traditional political processes is arguable, but we leave that for you to decide.

Our issue with secret sessions is simple – if taxpayer money is involved, then meetings about how it will be awarded should be public.

There is private money involved in the program, so that’s encouraging since it implies there will be some value for the money spent.

However, the history of previous grants from the U.S.Government and Department of Energy — going back to the “Partnership for a New Generation of Vehicles” of the 1990s and involving eight taxpayer-funded agencies — is not one that invokes optimism in this observer.

PNGV gave million upon millions upon millions of taxpayer dollars in lavish subsidies to the then “Detroit Big Three” and the National Laboratories (then threatened by the collapse of the Russian empire and the consequent diminishment in demand for more weapons of mass destruction) to develop and produce an 80 mpg family car.

The result?

Well, Ford and GM and Chrysler each built a prototype – all hybrids – then declared they were not affordable and continued building-gas guzzling SUVS and pickups for Saturday night cowboys. No money was returned to taxpayers of course, since the politicians didn’t demand a performance clause in the grants.

The only positive development out of this waste from a global view was — ironically — the Prius Hybrid.

Toyota was excluded from U.S. government grant money and proceeded to take the threat of a high mileage, low emissions U.S. car seriously. So Toyota went to work and actually produced not just one high mileage concept car, but sold millions of them. Thus the hybrid segment was born. One that Toyota and Lexus dominate globally.

Let us hope this X Prize competition turns out better for U.S. taxpayers who have invested more than $100 billion dollars in the auto industry since the waning days of the Bush administration 13 months ago.

Oh, in case you missed it, Toyota is now developing a $20,000 small hybrid as an extension to the Prius brand. I will bet it is on the road well before the winner of the X Prize.

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