Tomorrow's winning powertrain solutions reside in those technology combinations providing optimized propulsion systems with zero emissions and no cost or performance penalty compared with today's vehicles.The recent Kyoto Protocol for CO2 reduction and the California Air Resources Board (CARB) thrust for zero emission vehicles along with the European Regulatory community, motivate car manufacturers to adopt new light body structures with low aerodynamic drag coefficients, low-rolling resistance and the highest efficiency powertrains. The environmental equation expresses car manufacturers aptitude and desire to create zero emission vehicles at acceptable levels of performance unlike limited range electrical powered vehicle products.The cheapest solution to the environmental equation remains the conventional internal combustion engine ($30 to $50 per kW). However, new system optimization is necessary and will take many forms from alternative fuels enriched with hydrogen to diesel direct injected engines for light duty trucks and sport utility vehicles. Diesel fuel will probably be the favorite mid-term option with direct injection engines coupled with an electric motor. This combination gives higher efficiency, but a new optimized aftertreatment system will be necessary to satisfy emission mandates.Hybrid vehicles, the Toyota Prius being an excellent example, will increase in popularity with their high efficiency and driving smoothness.