Nicolas-Joseph Cugnot, a French inventor, is credited for having built the world's first self-propelled mechanical vehicle or automobile in 1765. The first automobile patent in the United States was granted to Oliver Evans in 1789 for his "Amphibious Digger". It was a harbor dredge scow designed to be powered by a steam engine and he built wheels to attach to the bow. In 1804 Evans demonstrated his first successful self-propelled vehicle, which not only was the first automobile in the US but was also the first amphibious vehicle, as his steam-powered vehicle was able to travel on wheels on land as he demonstrated once, and via a paddle wheel in the water. It was not successful and eventually was sold as spare parts.

The Benz Motorwagen, built in 1885, was patented on 29 January 1886 by Karl Benz as the first automobile powered by an internal combustion engine. In 1888, a major breakthrough came with the historic drive of Bertha Benz. She drove an automobile that her husband had built for a distance of more than 106 km (i.e. - approximately 65 miles). This event demonstrated the practical usefulness of the automobile and gained wide publicity, which was the promotion she thought was needed to advance the invention. The Benz vehicle was the first automobile put into production and sold commercially. Bertha Benz's historic drive is celebrated as an annual holiday in Germany with rallies of antique automobiles.

In 1892 Rudolf Diesel gets a patent for a "New Rational Combustion Engine" by modifying the Carnot Cycle. And in 1897 he builds the first Diesel Engine.

On 5 November 1895, George B. Selden was granted a United States patent for a two-stroke automobile engine (U.S. Patent 549160). This patent did more to hinder than encourage development of autos in the United States. Steam, electric, and gasoline powered autos competed for decades, with gasoline internal combustion engines achieving dominance in the 1910s.

The large-scale, heavy equipment parts production-line manufacturing of affordable automobiles was debuted by Ransom Eli Olds at his Oldsmobile factory in 1902. This assembly line concept was then greatly expanded by Henry Ford in the 1910s. Development of automotive technology was rapid, due in part to the hundreds of small manufacturers competing to gain the world's attention. Key developments included electric ignition and the electric self-starter, independent suspension, and four-wheel brakes.

Although various pistonless rotary engine designs have attempted to compete with the conventional piston and crankshaft design, only Mazda's version of the Wankel engine has had more than very limited success*

*source: Wikipedia, used with permission