General Motors is thinking beyond the gasoline engine in engineering a return to its past glory. The company is stepping up its research into hybrids in China and ethanol vehicles in the U.S. to compliment its continual commitment to fuel cell technology. Whether or not this strategy helps the bottom line or will produce significant environmental benefits is an open question.

GM is investing $250 million in China on a new hybrid research facility. Hybrids are the safest bet because the technology is already in production, so it is a matter of refining the power management and redesigning vehicles. The first of GM's dual mode hybrid vehicles in the U.S. are due out soon, so we'll see how fast they move the technology to smaller vehicles aimed at the Chinese market.

GM was out early in hyping fuel cell vehicles, and is now road testing 100 fuel cell vehicles in LA and NY. GM's Larry Burns has stubbornly pursued fuel cells for more than a decade despite the need for a massive infrastructure to support hydrogen distribution and a cost effective way of producing it. It has been a huge money sink for GM so far, but a breakthrough could pay back the investment. How long can GM continue to gamble?

Ethanol or flex-fuel vehicles are a good business strategy for GM since the company gets credit for displacing gasoline as determined by the EPA's CAFE scoring system. The company gets to tout it's green commitment while continuing to sell SUVs and trucks that get 20 miles per gallon or less because they can run on a biofuel. If cellulosic ethanol can be mass produced, GM will reap the benefits instantly by quickly increasing production of flex-fuel vehicles, and all of those big vehicles with yellow gas caps will be viewed in a different light.