When it comes to our future as a species, are you a pessimist or an optimist? When I came across the California-based X Prize Foundation some years ago, I became instantaneously more optimistic.

I first heard of the foundation in 2004, when the $10m (£8.8m) Ansari X Prize spurred Burt Rutan of Scaled Composites to take SpaceShipOne to the edge of space. Richard Branson is now using the technology for his Virgin Galactic programme.

This year, we will see the results of another X Prize, focusing on sustainable mobility. The Progressive Automotive X Prize is again worth $10m. This time the award will be for the first car capable of doing 100 miles per gallon of petrol or its energy equivalent. Critically, the winning vehicle, or vehicles, will be ready to go into mass production.

It is striking that while 2010 arrived with 41 competitors still in the race-nearly 100 vehicles had dropped out-none of the world's biggest carmakers were represented.

There are various reasons: one is that Toyota's popular Prius Hybrid achieves fewer than 75 miles per gallon. And none of the next wave of energy-efficient cars developed by leading companies would meet the criteria. Some also wonder whether the likes of a Ford or GM would want to risk losing out to vehicles made by teenagers in a garage, or even bedroom.

The genius of such prizes is that they encourage talented people to push technology to, and sometimes beyond, the limit. Even more significant, many contestants end up spending large sums, so the total investment can be many times the value of the prize.

Adding a dramatic twist, the X Prize Foundation is holding the multi-stage competition in the state of Michigan, home to Ford and GM. The qualifying events will run into the summer, with the winning vehicles celebrated in Washington DC in September.

The choice of city for the awards ceremony can hardly be accidental-governments need to back and help scale innovative mobility solutions, not simply bail out the ailing dinosaurs.

John Elkington is co-founder of SustainAbility and Volans (www.volans.com)