Some cars are made to perform well on the track. Micro hybrids excel at being stuck in traffic.

Peugeot, Mazda and a host of Chinese car companies plan on putting more emphasis on micro hybrids, particularly in emerging nations where gas is expensive, many can't afford all-electric cars and traffic is murderous. Micro hybrids come with a small battery pack and other electronic components. When the car has to idle, the gas engine shuts off in a micro hybrid. The electronics effectively allow the car to start again when a light turns green or the cars in front begin to move. The system will also make sure the radio and air conditioner keep working.

Micro hybrids, in a sense, are similar to KERS, or kinetic energy recovery systems, in that an electronic system is incorporated into a car to help improve performance. The goal, however, is completely different. In a KERS system, ultracapacitors release a jolt of power to let a car accelerate.

Micro hybrids could also allow battery manufacturers that aren't behemoths like Panasonic to participate in the car market, or at least that is what PowerGenix CEO Dan Squiller hopes. The company, which makes nickel zinc rechargeable battery, will market its cells for micro hybrids. "Lithium will probably win the battle for plug-in hybrids," he said, in part because of the energy density of lithium batteries. Because the performance requirements aren't as extreme, auto makers will look at a range of ideas, he said.

On another note, EcoMotors this week showed off its opposed piston/opposed cylinder modular engine during an event hosted by Khosla Ventures. EcoMotors and competitor Achates Power say that these types of engines will boost mileage and efficiency in diesel trucks and gas cars.

The challenge lies in developing a sales channel. Large manufacturers like Ford and General Motors are often reluctant to insert a third engine in their cars. Many companies licensed Wankel engines, but only Mazda went mainstream with it. According to sources, one company that is being incubated by a few venture firms in the Valley hopes to get around this licensing reluctance by changing the customer base. The engine from the startup will be targeted at motorcycle and three-wheeled-rickshaw manufacturers.

Finally, Dilip Warrier from Thomas Weisel Partners noted that Zenn, the Canadian electric car company, seems officially to be in deep freeze. It has formally ended its line of low-speed electric vehicles. At the same time, it has yet to receive a working prototype from EEStor, the ultracapacitor maker that claims it has created a component that can charge rapidly and propel a car down the road for 300 miles. Zenn is an investor in EEStor. EEStor's product has been around the corner for several years.