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Since its inception, the internal combustion (IC) engine has undergone continuous improvements with respect to efficiency and performance. Future regulatory and environmental requirements are not only driving still further improvements, but also extending the propulsion system efficiency through hybridization and potentially obsolescing the IC engine with hydrogen fuel cells. This paper describes the potential IC engine improvements to meet tomorrow’s challenges and the associated business and technical challenges in obtaining these challenges. The future propulsion system portfolio mix will encompass gasoline engines, diesel engines, hybrids and fuel cells. The critical role of the IC engine in this portfolio mix is examined.