There's a dutch company that has a working prototype of a city bus that uses an electric motor that get's better than 90% energy efficiency. This is compared with approximately 20% for a two stroke engine [cite], though the total efficiency of the bus is actually about 50% efficient since it has to burn the diesel fuel to create electricity first.

How'd they do it? They switched the stator and the rotor parts of the engine. [More] This means that the usual stator (the big coil of wire) goes around and the usual rotor now stands still -- it's the axle. An added benefit, obvious to those that know about electric motors, is that a motor can be run backwards to create energy. In this case, it's a free way to get regenerative braking, like that found on normal electric cars.
Sometimes it's the simple ideas that are the most revolutionary. One need not change any of the exisitng technologies or social conventions to take advantage of this -- the roads are the same, the driver does the same things he or she always did, the passengers might not even notice. [via Metafilter]
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