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Question posted: 5 months ago,
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Air Engine works on expansion of externally compressed air. Air is compressed using some electric pump and stored in big tanks in the car. The system works on 4/2 stage expansion of compressed air to release power. The compressed air is filled inside a sealed cylinder with movable piston to produce power. Ta 2 stage expansion system has two pistons connected in series, where expanded air from cylinder 1 is sent to cylinder 2. Similarly in a 4 stage system 4 cylinders are connected in series. The technology itself is old there are even some rotary air engines. MDI of france streamlined it to make a light car. Unfortunately they have not been very successful in making and selling it. Recently Tata contacted MDI and promised to manufacture MDI cars/technologies in India, which has not happened till date. We are expected to see Air driven NANO's and Indica's on road when TATA is ready with it. Because of the fact that it uses pistons to produce power, its hardware/construction is very similar to a 4 stroke engine.Some people have even patented techniques to make Hrbrids out of the compressed air engines.
Air engines are by nature not any more efficient than a petrol/diesel driven car. In fact some organizations have categorized the technology as having worser overall effect on the atmosphere than petrol cars.
The main advantages being that it is the cheapest alternative source of power in a petrol car and It can inter operate with Petrol/CNG engines. The main disadvantage being heavy cylinders to store compressed air.
However it will be overall cheaper to buy and run thanks to the fact that air could be compressed using electricity and run it with CNG in case you want to do a long run. If you are running a big taxi company this is one of the best solutions to move away from fuel as all the engine parts are well tested and running for years. It has no spikes in expenses like running a regular fuelled car.
Its one of those short term solutions until Electric cars become cheap and common.

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