A host of senior US politicians and auto executives looked on as the foundation, which promotes innovation in various fields, handed out its awards to the teams which beat out 108 other groups from around the world.
The big winner was Edison2, an upstart energy company based in Lynchburg in the US state of Virginia which walked away with a cool five million dollars for its "Very Light Car," a four-person sedan which managed 102.5 miles per gallon (43.6 km per liter) on a test track in Michigan.
Edison2's vehicle, which runs on E85 ethanol and weighs in at a feather-light 830 pounds (377 kilograms), was built out of steel and aluminum and has a snazzy racing aesthetics that dramatically cut down on drag. Its wheels are well outside the frame and the doors open upwards like gull wings.
Li-ion Motors Corp of Mooresville, North Carolina earned 2.5 million dollars winning the side-by-side, two-seater class with its Wave II, an electric vehicle powered by lithium batteries which recorded the equivalent of 187 miles per gallon (79.5 kilometers per liter).
The X-Tracer team out of Winterthur, Switzerland also won 2.5 million dollars, for its oval-shaped two-seater enclosed motorcycle that deploys two smaller side wheels at lower speeds.
In total, 111 teams from 26 countries submitted 136 vehicles to participate in the contest, launched by the non-profit foundation and an auto insurance firm in 2008, amid a US energy crisis and record high gas prices.
X Prize Foundation chairman Peter Diamandis said the innovation prize paralleled an increased awareness of the need to improve fuel efficiency.
"We've seen a shift in the market since we first launched this competition, and a greater awareness by people everywhere to think more seriously about the actions we take, and how they affect our environment," Diamandis said.
"Gas mileage ranks as one of our top concerns when purchasing a new vehicle and I believe strongly that the innovations showcased throughout the life of this competition will continue to impact and improve our car-buying options for the future."
The foundation said the winning teams, armed with their prize money and US-funded technical assistance, will seek to "catapult their vehicle into the consumer market."
The non-profit promotes scientific and technological advances in all fields. It recently launched the Google Lunar X Prize, a 30-million-dollar competition to land a robot on the moon, travel over its surface and beam photos and data from its journey back to Earth.
