What I find especially interesting about McCain’s proposed car battery contest is that like other poorly-thought-out government incentives, it warps the market. McCain’s contest assumes that the solution is a chemical battery, and ignores equally valid solutions — for example, the hybrid car that is about to be built that uses compressed air tanks instead of a battery to store energy. Note that Obama is guilty of the same problem with ethanol subsidies. Government subsidies should reward goals (like reducing pollution or global warming) not specific (but transient) technologies. For years, the government has been subsidizing the oil companies, and see where that got us.
Like the “gas tax holiday” this is more of a political attention-getting stunt than a real solution.