While Toyota and Honda are duking it out over who will sell a cheaper gas-electric hybrid, a new company in Colorado promises to start selling a diesel-hydraulic sports car as early as next year.

Loveland, Colo.-based Lightning Hybrids is working on two new models that will run on a 3-cylinder, 90-hp Volkswagen turbodiesel engine mated to a 150-hp hydraulic pump. Designed to run on biodiesel, the combined 240-hp, oil-burner will zoom from 0-60 mph in 5.9 seconds and weigh just 1,750 lb. Average fuel economy is 100 mpg.

The patented, rear-wheel drivetrain takes advantage of hydraulic tanks to store energy. It may sound far-out, but vehicle engineers are increasingly looking at hydraulics as a power aid. Such automakers as Peugeot and China-based SsangYong, among others, are working on diesel-hydraulic cars to boost fuel economy and performance in the hybrid arena.

Lightning's styling is futuristic with retro, classic-car roots. Dan Johnson, CEO and chief designer, modeled the car from his 1963 split-window Corvette. Model LH3, available next year, is a three-wheeled commuter car. Model LH4, a four-wheeled coupe, will follow in 2011, says Johnson, who unveiled a prototype at the Denver Auto Show on April 1. Pricing for the new car is expected to start at $39,000.

The company also plans to build retrofit kits for existing cars and is competing in the Progressive Automotive X-PRIZE competition, which features alternative-fueled cars, including several diesels.

--Tudor Van Hampton