Auto: Honda's Drive

As I took the curve at just under 100 M.P.H., Sachito Fujimoto was getting very, very nervous. I was behind the wheel of Honda's new FCX concept fuel-cell vehicle, the most advanced hydrogen-powered vehicle on the road, probably the most expensive and certainly the only one of its kind. All of which made the company's decision to give the keys to a journalist with an expired license and no insurance a bit questionable. After parking the car at the test track--without a scratch--I asked Fujimoto, a lead designer of the FCX, what he thought of my driving. "I was just praying," he said, "Please don't break it."

Amateur test drivers might be the only thing that holds back Japan's second biggest automaker. Honda last month showcased its prototype green technologies, including clean-running diesel engines, new ethanol cars and high-performance hydrogen fuel-cell vehicles. The burst of innovation is part of a move to take advantage of high gas prices, which have helped the fuel-efficient company increase U.S. sales 8% in the year's first six months and reclaim its status as a leader in green tech.

It's fair to say that environmentalism is existential at Honda. "We are car producers," says Takeo Fukui, Honda's CEO. "As long as we're doing business producing cars, we need to resolve the environmental problems that arise from what we produce."

In 1972 Fukui designed Honda's thrifty CVCC engine, which met the emission standards of the 1970 Clean Air Act without an expensive catalytic converter. It made Honda the brand of choice for early environmentalists. "Honda has always been the leader in environmental technology," says Dan Sperling, director of the Institute of Transportation Studies at University of California at Davis.

But that changed with hybrids. Although Honda launched the Insight, which had gas mileage superior to its main competitor, the Toyota Prius, the latter vehicle seized the public imagination, thanks to better drivability and better marketing. "In North America, Honda got caught with its pants down on hybrids," says Eric Noble, head of the auto-consulting company the CarLab. "They've been badly eclipsed by Toyota on looking green."

That's why Honda is so eager to make the next green breakthrough, spending billions to develop everything from a new form of ethanol production that can utilize the waste parts of plants to a fuel-efficient minijet. But the design that might have the best chance of making an immediate difference is a throwback: Honda's clean diesel car engine. Diesel is the choice of fuel-guzzling 18-wheelers, but it burns as much as 30% more efficiently than gasoline. It's also dirtier. But last month Honda unveiled an engine that uses a new catalytic converter to block pollutants like soot and nitrogen oxide, a greenhouse gas. Honda says the engine, which it expects to market in the U.S. by 2009, will meet California's new emission regulations, the toughest in the world. That could translate to a competitive advantage, since big states like California can shape the global market. "It's a real coup," says Philip Gott, director of automotive consulting for Global Insight. "Honda tends to be very keen on bringing technologies to market first."