Which way next?

August Bank Holiday is a good time to contemplate the demise of the motor car. All over the country roads will be jammed with metal boxes pumping fumes into the rural air. Tomorrow, long stretches of motorway will be inhabited by shuffling, foul-smelling steel caterpillars.

And things will only get worse. The Council for the Protection of Rural England said recently that traffic on country roads will double in the next 30 years. Last week, as asthma attacks intensified, the Government announced plans to give local authorities

powers to close town centres to traffic if new pollution norms are exceeded. The private car, surely, is on its way to the scrapyard.

Well, maybe. But to believe that would be to underrate both the resilience of capitalist enterprise and the habit of technology to come to the rescue. There is a parallel with oil, which has been due to run out in 50 years' time for as long as anyone can remember. Somehow, though, new techniques and greater ingenuity have identified new reserves at least as fast as we have been burning the stuff.

There are at least three areas of technology that could mean that the private car and the environment can co-exist peaceably. One is the Information Superhighway. The second is traffic management. The third is the motor car itself.

The Information Superhighway could - should - slash the volume of traffic on the roads. When fibre optic cables allow vast amounts of data to travel at the speed of light between computers, many of today's journeys will become unnecessary, and it is reasonable to suppose that most people will not travel if they have an any alternative.

Consider

shopping. As local shops have given way to out-of-town supermarkets, so legs have given way to cars. Already supermarkets are experimenting with home shopping via the Internet: you can order a case of wine from Sainsbury's, and it will be delivered to your door. It is small-scale business, but as competition combines with speedier computer links, it will grow rapidly. In 15 years it could well be normal to order your basic groceries from the television/computer in the living room. And for every dozen motorised shopping trips, there will be one delivery round - probably in an electric van.

Work will be transformed too. More people will work from home, connected electronically to their bosses and to each other. Every worker who gives up commuting will save two journeys a day.

Who are those lone drivers whizzing up and down motorways? Salesmen, charging from one meeting to the next. Physical meetings are usually more effective than phone conversations. But what will happen when a high-quality audio-visual link connects the salesman's desktop computer to that of his customer? He will be able to send tables, brochures, photographs, even video. The Mondeo will be able to stay in its garage.

There is more. Visits to the bank, the travel agent, the estate agent - all can be replaced by electronic "visits", and probably will be. It will be surprising indeed if the electronic revolution does not at least cut back the growth of car use.

Traffic management sounds mundane, but is critical to cutting fumes, because a moving car is far less polluting than one that is stationary. Here "telematics" is the technology to watch. It means, simply, better use of electronics to make cars, and cities, work better. The European motor lobby group ACEA says that advanced telematics could cut carbon emissions by up to 50 per cent.

On-board devices that tell drivers where there are traffic jams are already spreading. In the future when a car gets on to a motorway or an urban highway, electronics might wrest control from the driver, and the vehicle will in effect become part of a "train". A central computer will combine with the car's own computer to "lock" it to the car ahead and behind, and to make sure the traffic moves along in the most efficient way. The most obvious and alarming effect will be that cars will travel closer together, which will free up road space.

The third area of new technology - the car itself - is in some ways the most exciting, but also the most problematic. The introduction of fibre optic networks and telematics are both "additional technologies" - they do not threaten an existing, and massive, industry. A revolution in automotive technology could.

In the early years of this century the motor industry was in turmoil as the internal combustion engine battled with steam and electricity to become the standard. It won and since then the industry has poured millions into making this somewhat Heath Robinsonish device more efficient. The last thing it wants now is for the mileometer to wind back to those early days, with different types of engine and fuel vying to knock the established model off its bearings.

But that is exactly what is likely to happen. Though the car is not the sole demon of pollution, it is far too popular for its own good. As Garel Rhys, motor industry professor at Cardiff Business School, points out, "when mass motoring arrives in China and India, in about 2020, we will get to a level of emissions the world cannot sustain."

Restrictions on exhaust emissions have been getting tougher. Despite the odd reverse - notably the decision by the Californians that they would not after all require two per cent of new cars to be "zero emission" by 1998 - motor executives know their lives will become ever more difficult. That is why they are pouring money into research and development. "There is a huge motivation to get the problem solved. The whole future of the industry rests on finding a solution," says Richard Bremner, associate editor of Car magazine.

The research is heading off in a bewildering number of directions, ranging from tweaks of the petrol engine to the development of a car that runs on air.

The petrol engine must not be written off because, Prof Rhys says, "the amount of energy in a gallon of petrol is not matched by anything else at the moment". He believes there is plenty of scope for more economy and less pollution - and his view has received backing from an unusual source. Earlier this month Greenpeace, the environmental group, showed off its "Smile", a modified Renault Twingo powered by a tiny (360cc) but highly-efficient petrol engine. Smile uses 43 per cent less fuel than the conventional Twingo.

The trouble with petrol (and diesel) is that the exhaust is noxious. Catalytic converters - as fitted on all new cars in Europe and the US - cut the fumes, but also cut efficiency. That is why alternative fuels, still powering internal combustion engines, can make sense.

Cars were converted to run on coal gas in the Second World War. The fuel, uncompressed, was held in great balloons, either on the roof or in a trailer. Natural gas is today's equivalent: it is clean, and can either be compressed or liquified. But the storage problem has not been banished entirely. Ford sells a car powered by compressed gas in the US, but the boot is home to a spherical fuel container that

obstructs the golf clubs. The Rover Sterling used by Sir George Young, British transport secretary, has the same problem.

This is not the main difficulty, for gas is trapped in a vicious circle. No one will put gas refuelling pumps into service stations until there is sufficient demand; and no one will buy gas-powered cars until there are enough refuelling points. It is a classic case for government intervention, which is why the Japanese government is encouraging the installation of compressed gas pumps.

There is a consensus now that battery power is never going to be more than a bit player. Jim Randle, formerly Jaguar's chief designer and a leading automotive engineer, says that weight-for-weight, batteries can never come close to providing the same power as petrol. "You're kidding yourself if you think you can ever make an electric car as efficient as fuel," he says.

Though more efficient car batteries will be developed, they will be suitable only for specialist urban use. Ford in the US is about make an electric pick-up based on the Ranger - but with a range of 50 miles per charge and a price double that of the petrol version, sales will be limited. The electric milk float will probably be reborn as a delivery vehicle for Internet-ordered goodies, and some people will be prepared to pay for a second car for town trips. But a mass market for expensive battery-driven vehicles seems as far away as ever.

That is not to say electric power will not play a big role in the car of the future. Indeed both the most promising developments - hybrid cars and fuel cells - are based on electric motors.

When Car magazine gathered a group of experts to design a replacement for the Mini, it made it a hybrid, sporting one electric and one petrol motor. The idea sounds clumsy, but it is causing excitement. "I think there's every chance a hybrid car will be available within 10 years," Mr Bremner says. Ford says it is "spending a lot of time on hybrids, though we see them as a longer-term transportation option".

There are as many varieties of hybrid as there are yoghurts in Tesco. All they have in common is that they have two motors - one electric and one not. Car magazine's Mini is a radical example. Its wheels are driven by an electric motor, whose power is generated by an advanced small petrol engine. In town this motor shuts down and the car relies on its six batteries, while in the country, the generator and batteries can work together to give a boost. The car can zip to 60 mph in 10 seconds, with an average 80 miles per gallon in town. The best of both worlds.

This vehicle exists only on paper. Volkswagen's hybrid has been tested extensively, though it is much less radical. Based on the Golf, it runs on an electric motor in town centres, with a diesel automatically cutting in when more power is needed. In typical urban driving, VW says, it gets 113 miles to the gallon. Other companies that have shown off hybrids are Chrysler and Renault, which says that its Next model, which uses a BMW motorbike engine, will definitely go into production.

The most intriguing hybrid has come from Professor Randle's fertile brain. He has designed a taxi based on a gas turbine, or jet, engine. Gas turbines run best at a constant speed, which is why they are of limited use as the main engine, but are excellent as generators. A jet engine hybrid fuelled with natural gas would, Prof Randle believes, be both economical and clean.

Beyond the hybrid is what many engineers regard as the ideal solution: the hydrogen-powered fuel cell car. "Hydrogen is the ultimate energy source," Prof Randle says, because it can be derived from water and will never run out. The idea of the fuel cell is simple. Sir William Grove demonstrated in 1839 that if you combine hydrogen with oxygen electricity is generated, while the only "emission" is water (H20). Each fuel cell acts as a mini- power station, generating electricity as the hydrogen reacts with the oxygen in the air: it is thus like a battery that never has to be recharged.

Engineers have been trying to build an "air-powered" vehicle ever since Grove's experiment - and some have succeeded. A fuel cell tractor was built in 1959, and the technology was widely used in the space programme.

But the practical problems are immense. Fuel cells are heavy, hydrogen can be dangerous - remember the Hindenberg disaster? - and the engineering is complex. Most challenging is the difficulty of producing hydrogen on a large scale. It will be interesting to see whether Daimler-Benz, which demonstrated a prototype in May, is accurate in its prediction that a fuel cell car will be in production by 2010.

So, what can be done to translate these clever ideas into reality? Governmental legislative stick is one thing, but no government can expect companies to pile up losses indefinitely.

And that is the problem - none of these cars can offer the value-for- money of a conventional mass-produced vehicle. The public may support environmentalism but, as Volkswagen found, that support does not extend to its pocket. The VW hybrid could, a spokesman says, be put into production and sold for the price of the sporty Golf GTI. But when it marketed a gently "green" Golf a few years ago, it found that only a handful of people were prepared to pay a small premium. "Unless there is a fiscal incentive, no one would buy the hybrid," the spokesman says.

Tax breaks could be used to tackle the problem - they worked with lead- free petrol, so there is a precedent. But in the long run the manufacturers will have to find a way of making the car cheaply enough to sell it profitably. "Volkswagen's hybrid could probably get to within 10 or 15 per cent of the petrol price if it can get its volumes up," Prof Rhys says. "But that is the problem: how do you get the volumes you need? It's very risky to lay down large-scale production in anticipation of huge demand."

We need a final technological change to solve the problem. Except this time, it is a matter of removing rather than adding technology. With a standard steel car, it is difficult to justify production of less than 200,000 a year. But it is likely that these new cars will be made of special plastics, where the economies of scale are quite different. They will have to be largely hand-built, as fibreglass cars are now. The answer, Prof Rhys suggests, will be to set up factories in low-wage countries where it is possible to build 20,000 cars a year and still make a profit. So that is the future - maybe. High-tech cars built in low-cost countries: Poland, Mexico. What about Britain?