The engine emits one-third the carbon dioxide of conventional motors of the same size. Cold air, compressed in tanks to 300 times atmospheric pressure, is heated and fed into the cylinders of a piston engine. No combustion takes place, so technically there is no pollution actually produced by the car, although the energy needed to compress the air may still come from polluting oil- or coal-burning power stations.
A Nano featuring the air-powered engine would be able to travel up to 200km for just $3 worth of electricity.
Officially, Tata is remaining quiet about any compressed air variants of the Nano and it’s uncertain what the option will cost. The news, reportedly recently by the New York Times, was first revealed after Tata's signing of a deal to license the technology from MDI.
A compressed air variant of the Tata Nano will have environmentalists breathing a collective sigh of relief after concerns that the Nano could be the 'beginning of the end' for the environment as millions of new drivers India start to adopt cars.
MDI is also set to enter a compressed air vehicle in the Automotive X Prize competition in collaboration with Zero Pollution Motors, in an attempt to prove that compressed air vehicles are a viable alternative internal combustion and electric vehicles.