Light duty vehicles, i.e. passenger cars and light trucks, account for approximately half of global transportation energy demand and, thus, a major share of carbon dioxide and other emissions from the transport sector. Energy consumption in the transport sector is expected to grow in the future, especially in developing countries. Cars with alternative powertrains to internal combustion engines (notably battery, hybrid and fuel‐cell powertrains), in combination with potentially low carbon electricity or alternative fuels (notably hydrogen and methanol), can reduce energy demand by at least 50%, and carbon dioxide and regulated emissions much further. This article presents a comparative technical and economic assessment of promising future fuel/vehicle combinations. There are several promising technologies but no obvious winners. However, the electric drivetrain is a common denominator in the alternative powertrains and continued cost reductions are important for widespread deployment in future vehicles. Development paths from current fossil fuel based systems to future carbon‐neutral supply systems appear to be flexible and a gradual phasing‐in of new powertrains and carbon‐neutral fluid fuels or electricity is technically possible. Technology development drivers and vehicle manufacturers are found mainly in industrialised countries, but developing countries represent a growing market and may have an increasingly important role in shaping the future.